Yesterday’s Indian Express carried a piece by me on the perverse oil subsidy that the government of India provides. I begin that piece with my favorite Douglass North quote: “Economic history is overwhelmingly a story of economies that failed to produce a set of economic rules of the game (with enforcement) that induce sustained economic growth.” I used that quote in the other piece published in Mint today.
The reason I like that quote it because it goes to the very heart of the problem of India’s economic development. Indians as a collective are no less than other collectives around the world; India is endowed with natural and human resources; yet India is desperately poor. Why? Because we have failed to develop a set of rational rules to play by. Refusing to acknowledge that failing will ensure our continued poverty.
Anyway, here’s the text of that India Express piece.
Continue reading “How we Subsidize the Rich”