Classic

On the Eggs

Jai Choorakkot wants to know whether my attack on Dilip D’Souza amounts to a defence of reforms. That is a fair question to ask.  One of my pet peeves is that people believe that a successful counter-attack amounts to a defence of their own position. I’ve myself come down quite sharply on people whose defence of Mao amounted to saying that I am a hypocrite because I supposedly support Kissinger (or Pinochet – it was not clear who) So let’s accept that my attack on Dilip was an attack on Dilip, and move on to the question of reforms.

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The Only Workable Way

Dilip D’Souza, 29 January 2008:

Among other interesting jobs he held in the Indian bureaucracy, my late father was Mumbai’s municipal commissioner – the equivalent of a mayor – from 1969 to 1970. Low-cost housing was always his great interest, and for the last 14 years of his life, he ran a low-cost project in Mumbai’s northern suburbs founded on the cross-subsidy principle. It has about 5,000 subsidized flats, plus about 1,100 others and commercial space for sale at market rates.

My father died last September, but the project goes on. Why does it work? Because the subsidy is small, so residents pay close to market rates for their little flats, and because it has taken so long to complete – nearly 25 years. The slow progress troubled my father and his colleagues greatly. But they understood that in the convoluted world of Mumbai, this remains the only workable way to provide livable, sustainable housing for the poor.

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Tariffs for a Growing Country

The second post on the Globalization Institute blog links to a book which contests the idea that protectionism is good for developing countries.  Yes, the currently rich countries imposed heavy tariffs when they were in the growing phase. But this does not mean that the tariffs were good for them. Rather, the tariffs themselves are evidence that a lot of trade was occurring. Note that an isolated country does not need to impose tariffs, because no one can import or export to that country anyway. It is only when the country is exposed to the outside world that domestic producers start lobbying for tariffs on imports. In the 19th century, something similar happened. New transport technologies reduced the costs of trade so much that imports suddenly became possible. It was to stop those imports that tariffs were imposed. But…

On balance, it appears that the new transport technologies were so cost-reducing that that their effects swamped those of rising European and American protectionism. 

So, nope. Trade is not bad for you, whatever your level of development.

Remaking of Mumbai Federation

This is interesting. A builder wants to redevelop a 200 acre area filled with chawls in South Central Mumbai. The way he wants to do it is by forming a business partnership with all residents. All stakeholders will become stockholders in his company (I am not exactly sure what the legal structure will be, but the idea is good.)  He still wants the government to help, which is bad, but this is a refreshing change from the slum rehabilitation boondoggles run by the government.