Check out these cool visualizations of the data from the Human Development Report 2005.

[Hat tip: Patri]

Fortune has an excellent article on the messy state of Indian economic liberalization:

China’s economic miracle was achieved by getting the basics right–building good roads, educating women and young girls, loosening labor restrictions, and opening the economy to competition and foreign trade.

India, by contrast, is the global economy’s idiot savant. It excels at the impossible, turning out hundreds of thou-sands of brilliant engineers a year. Its software houses manage complex data across thousands of miles of undersea cable for the world’s most sophisticated clients. India has world-class business leaders and, unlike China, solvent banks. And yet India flubs the obvious stuff. The national roadway network is a shambles and the power grid even worse. Nearly a third of India’s population–and more than half its women–can’t read or write. India has moved grudgingly to lower tariffs and balked at turning money-losing state-owned enterprises over to the private sector. Red tape and corruption discourage foreign investment, as do restrictions on how firms deploy workers.

This bipolar development model is reflected in the crazy-quilt of wealth and squalor in cities like Mumbai, where billboards touting Mallya’s Kingfisher beer and Standard Chartered Bank’s investment-planning experts tower above sprawling slums, and urchins approach cars at gridlocked intersections hawking copies of Harvard Business Review. In Bangalore, executives visiting the immaculate campuses of software firms like Infosys and Wipro marvel that while their data can travel to the other side of the earth at the speed of thought, they must crawl along in bumper-to-bumper traffic for more than an hour to get back to their hotels.

Hindu Business Line: “Low tax-GDP ratio daunts India’s quest to join developed world”

India is keen on joining the league of developed countries by 2020 as per the stated objective of the Government a couple of years ago. But with targets of the gross tax/GDP ratio (combined Centre and States) not reaching the 17 per cent the country had in the past, the latest picture from OECD on the tax front highlights the Herculean task ahead for the Indian tax authorities to push up the ratio.

Andy Mukherjee argues that the Indian government is squabbling liberalization opportunities by managing the welfare state poorly:

The architects of India’s rural job-guarantee program forgot to ask themselves a crucial question: Instead of paying one group of villagers to dig holes, and another to fill them, wouldn’t it be cheaper to just give people the money and have them stay home? …

The nature of the actual work to be done is so incidental to the program that it found a mention only in the appendix of India’s National Rural Employment Guarantee Act published last month. Why not dump the charade of job guarantees and just give people the cash? …

An elaborate job guarantee program that requires synchronized efforts by five levels of government across five different ministries and a plethora of coordinators is like a machine with too many moving parts: It’s bound to fail…

By contrast, a cash grant, which covers both rural and urban India, could have been used as a bargaining chip for the Indian government to mobilize political support for doing away with subsidies on food, fertilizer and fuel, which together cost $10 billion last year. [IHT]

It’s fine to defend the conclusion that development aid does not help, and may in fact hurt, economic growth, but oversimplified graphs aren’t much help, as Jim rightly complains.

However, I think the oversimplification is partially a result of cramming one side of an extensive development economics debate into a one thousand word article. In his 30-page policy brief on the subject of aid and development, Fredrik Erixon includes the caveat that “these figures alone do not overthrow the idea of aid.” He then develops his argument by referring to econometric work by William Easterly and Peter Boone (which Jim criticizes elsewhere).

The oversimplification problem is common in articles on development written for laypersons. For example, the accompanying article by Jeff Sachs, which defends aid as useful, features a graph that is equally misleading.

Obviously government health expenditure is correlated with a number of other features that are important determinants of infant morality, and this graphic provides little useful guidance to the policy issues in questions.

Jeff Sachs has an article titled “Can Extreme Poverty Be Eliminated?” in the latest issue of Scientific American. Much of its content will be familiar to those who have followed Sachs’ work over the last year or so. This is the paragraph that I found most intriguing:

A new kind of development economics needs to emerge, one that is better grounded in science–a “clinical economics” akin to modern medicine. Today’s medical professionals understand that disease results from a vast array of interacting factors and conditions: pathogens, nutrition, environment, aging, individual and population genetics, lifestyle. They also know that one key to proper treatment is the ability to make an individualized diagnosis of the source of illness. Likewise, development economists need better diagnostic skills to recognize that economic pathologies have a wide variety of causes, including many outside the traditional ken of economic practice.