Wahiduddin Mahmud, Popular Economics: Unpopular Essays (Dhaka: UPL 2002). Pp. 154+xiii. Price: 275 BDT

Jun 17, 2020

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It is a well-established tradition in academia that distinguished scholars of different disciplines republish some of their best articles in a single volume so that readers can get an easy access to their works. As Prof. Dr. Wahiduddin Mahmud is one of the renowned economists in Bangladesh, it is perhaps appropriate that some of his works should be drawn together in this way. In his case most of the writings are newspaper articles and some are his speeches. He wrote these articles between 1997 and 2002 and the timings of these essays of this book coincided with his two successive terms (1995-1997) and (1998-2000) as the President of Bangladesh Economic Association (BEA).

The book was first published in May, 2002 and was so popular that in August 2002, the second impression came out. I am reviewing the latest print of the book which came out in March 2009. Eleven years have been elapsed since the latest publication, so many of the data and information may be outdated to the readers, but the analysis and implications are still relevant to the present context of Bangladesh society and economy.

Although there is no unifying theme, the essays in this book touched upon a variety of topics including the lives and works of noted individuals, national economy and politics, democratic governance, corruption, poverty, health system and so on. Essay-5 entitled “Sen On Social Choice” is a compliment to the 1998 Nobel laureate in economics Professor Amartya Sen who evaluated social arrangements and viewed the question of equality by shifting from utility-based notion of welfare to capabilities and functions. Thus, according to Prof. Mahmud, Sen led the way towards making economics a much richer, wider and humane discipline. Essay-22 is a tribute to Professor Rehman Sobhan who is a staunch critic of neoliberal or leissez-faire ideas of the 1980s and believer of greater important role of government in promoting public welfare. To Professor Mahmud, within Bangladesh, the state-versus-market debate has had the risk of being unfairly tilted on one side, since there was no one of Professor Sobhan’s stature to represent the case of the market. In Essay-10, Prof. Mahmud discusses on Markets with imperfect (asymmetric) information by George Akerlof, Michael Spence and Joseph Stiglitz for which they received the Nobel Prize in Economics in 2001. Prof. Mahumd observes that the producers and sellers of better-quality products, in developing countries like Bangladesh, are at a disadvantage and face unfair price competition from others and markets get dominated by adulterated foods or fertilizers or by low-quality medicines. In Bangladesh, it is seen that consumers themselves often deal with the informational problems by seeking advice of a friend who have technical knowledge or exploring social networks.

Corruption is a major theme in essays 12 and 13. Article-12 entitled “Corruption, Accountability and Democratic Governance”, the author points out that the money and muscle power based election system gives rise to corruption where men of integrity and principle have a very little chance to be elected as public representatives. He advocates civic actions which can create at least some pressure to bear upon political parties to let public know their proposed action plan against corruption. Essay-13 entitled ‘The Corruption Trap’ outlines an economic model with an explanation of how corruption spreads or is limited. His model explains in an elementary way how two otherwise similar countries (both in terms of socio-political cultures and moral values) can end up with very different level of corruption depending on whether and when some corrective measures were taken. An important takeaway of this article is that we should not delay in taking corrective measures.

Essay 2, 3 and 9 entirely focus on political issues. In Essay-2 entitled “The Game of Politics: Co-operation, Competition and Confrontation”, Prof. Mahmud uses Game theoretic approach to discuss three possible rules of behavior in politics: the rule of unilateral distrust; the rule of unilateral goodwill; and the rule of reciprocity. He thinks that two major political parties, shunning confrontational politics, can gain by improving the quality of democratic practices, so that these can be taken as “win-win” propositions. In essay-3, published in 1995, entitled “The Politics of Brinkmanship: A Game-theoretical Interpretation”, Prof. Mahmud uses a game theoretic approach to show four alternative outcomes about materializing a demand for a Caretaker Government. Though Caretaker Government system was introduced by amending the Constitution, the parliamentary system of democracy could not avoid disaster because neither side actually was agreeing to a compromise. In Essay-9 entitled “Businessmen in Parliament: Loan Default and Election Candidacy”, Prof. Mahmud showed that more than 60 percent of the nominations by both Awami League and the BNP are occupied by businessmen who find politics as a lucrative business. Most of the candidates are seen to regularize their loans to take part in the election and become defaulters again. He advocates that culture of habitual loan defaulting should be checked by amending the definition of a loan defaulter in the Bank Company Act.

Democratic governance is a major theme in essays- 8, 14, 17, 18 and 21. Essay-8 entitled “On Floods, Famine and Democracy” was written in October 1998 when Bangladesh was affected by a severe flood. This article is highly relevant to this present context of Coronavirus pandemic because like that time, ensuring food security is an immediate priority in pandemic and post-pandemic economic management. He advised to set up a countrywide monitoring and surveillance mechanism so that the signs of economic destitution and food deprivation can be revealed. Keeping food prices within reach of common people and generating enough purchasing power in the hands of the pandemic-affected poor are the most challenging tasks now. Imagine if we could develop this monitoring and surveillance mechanism in 1998 and keep on updating on yearly basis, we could possibly be well-prepared in terms of targeting the most deserving people for assistance. His open letter to the prime minster and the leader of the opposition in Eassy-14, published in February 2000, called both parties for working to eliminate all poverty, avoid environmental disaster, develop human resources, achieve universal literacy and healthcare etc. and not wasting our energy on political dispute and moving towards self-annihilation. Essay-17 entitled “Market-Oriented Development and Governance”, he stated that the government should not use economic policy instruments for political ends. To him, economic problems should constitute the most salient issues in the country’s political debates and discourses to make the democratic system to be conducive to good economic management. The financial sector reforms, economic reforms, and rent-seeking were the issues discussed in Essay-18 entitled “Governance for Development”. His overall conclusion is that the effectiveness of economic policy reforms depends on complementary improvement in the pollical environment. In Essay-21 entitled “Local Government: What Are the Debates About”, he provides rationale for allowing local government bodies to be eligible for direct donor funding like NGOs. To him, this will create a heathy competition among these bodies, and between them and NGOs, in proving their aid worthiness. The advised to try the idea at least on an experimental basis.

Macroeconomic issues and macroeconomic management are discussed in Essays -6, 16, 19 and 20. Bangladesh has revised National Income Estimates upwardly ranging between 26 to 30 percent for various years for 1990-91 onward. In Essay-6 entitled “The New National Income Estimates: Are We Better-Off by Thirty Percent?”, Prof. Mahmud thinks this upward revision of the GDP series as the right direction though this only gives the psychological satisfaction and nothing changes in reality as far as the actual living standards of the people are concerned. He expressed his concern that a large ‘black’ or hidden economy in Bangladesh is not accounted for in the official GDP estimates and there are some parts of the estimated GDP that don’t represent any ‘productive’ activity, and may in fact represent a loss of social welfare. In Essay-16 entitled “Bangladesh Economy into the 21st Century”, he discusses on the political economy of state versus market, social development and poverty alleviation, and globalization and development strategy. To pursue these social goals earnestly, political leadership must create a conducive atmosphere. In Essay entitled “How to Assess the Budget”, he gave comments on pre-and- post budget for the fiscal year 2000-01. He emphasized on institutional reforms for a better functioning market economy. In Essay-20 entitled “The Report of The Panel of Economists on The Draft Five Year Plan”, he stated that the planning process must be a break from the past tradition of setting lofty expectations by political determination and popular support and the primary focuses should be on policies rather than on targets, on reforms rather than on projection of performance indicators. Essay-4 entitled “GDP Per Square kilometer in Bangladesh: Implications for Sustainable Development”, Prof. Mahmud shows that Bangladesh virtually leads the entire developing world in terms of income generated per Square kilometer of land area due to extremely high population density. He sees that the problem of shifting agricultural land to other uses can be solved if rural settlements in conglomerations can be grown in a self-sustaining way with proper incentives and infrastructure planning.

He discussed on Poverty in Essay- 15 and health in Essay-23. In Essay-15 entitled “Attacking Global Poverty: The New Aid Philosophy or Aid Populism?” He suggests to bring the issue of poverty reduction into the mainstream of international economic policy-making and action. In poor countries, the capacity to adapt new technologies for agricultural growth has a direct implication for poverty and food security. These countries need foreign aid and appropriate technical assistance in this respect. In Essay-23 entitled “An Encounter with Our Hospital System”, he thinks that the collaboration of hospital with foreign hospital chains can help both transfer of technology and maintain management standards. Private philanthropy can take the form of an endowment fund from which assistance can be provided to deserving patients on an ability-to-pay basis. He sees simple economic logic of encouraging such hospitals to grow. A part of the foreign exchange currently spent by Bangladeshis seeking medical treatment abroad could be saved.

Above all, the essays reveal the breadth of Professor Wahiduddin Mahmud's work on Bangladesh economy and deal with contemporary development problems facing Bangladesh. Some of the essays represent a mix of economics and politics and in some essays, he also deals with pure political issues from an economist’s point of view. He has tried to avoid technical jargons in these articles and in some essays, he has explained technical issues in a very lucid manner except where avoiding the jargons are not possible. Thus, the book has become readable to the general audience who are deeply concerned about Bangladesh economy. Thus, the book may be regarded highly as a guideline for those scholars and economists who would like to write economic issues for the general readership.

The author may think of preparing a manuscript of this book with incorporating more articles he has written in 2000s and 2010s and may think of publishing the book in 2021 when the University of Dhaka, where the author studied and taught, is going to celebrate 100-year anniversary and Bangladesh is also going to celebrate 50-year anniversary of her independence.

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Foyasal Khan has earned PhD in Economics from the International Islamic University Malaysia. He holds BSS and MSS degrees in Economics from the University of Dhaka.