This way of governance was initially developed in the western state of Gujarat when Modi governed as the Chief Minister. Rather than follow an inclusive system of governing the country, Modi has opted for an exclusionary system, which keeps out all non-Hindu groups for involvement in making public policy. This approach has limited the participation of the country’s 200 million Muslims in governance. I have written about this feature of Modi’s India in an article I titled “India’s Mussalman problem”. Today my focus will be on the lessons that can be drawn from the way governments in the eastern part of the continent rule their domains.
I had a long stint in the World Bank – I worked at the institution over a period of 26 years, eight of which included directorship of the China Program. The directorate I managed was part of the East Asian Vice Presidency which included several countries that came to be called “miracle economies”. They were miracles because of the rates of growth in the national income and personal incomes had reached unprecedented levels. This was done by the governments getting actively involved in directing the development of private enterprises. They were directed to produce cheap manufacturers that had large markets in the United States and Western Europe.
The Organisation for Economic Cooperation and Development, the OECD, says that emerging Asian economies (including China, India, Indonesia, Vietnam and others) contributed more last year to global economic growth than the rest of the world combined, and will do so again 2026. Nicolas Kristof, who covers development issues for The New York Times, wrote in a recent article that “Asia is not a monolith, but the gains that were first visible in Japan and the small ‘tiger economies’ (Hong Kong, South Korea, Taiwan and Singapore) then spread to China and much of Southeast Asia, and more recently to Bangladesh and India. One factor was the investments in human capital.” It is interesting that Pakistan was excluded from the list of high-performing Asian economies.
In Taiwan, the constitution prescribes that education, culture and science must account for at least 15 per cent of the national budget. A law that updated it mandates that at least 22.5 per cent of combined net budget revenues for governments at all levels go to education. In the United States, education has accounted for a bit more than 2 per cent of federal budget and about one-third of state and local spending. “But couldn’t we Americans edge a little closer to Asia in terms of educating our population?” asked Kristof in concluding his article. “Maybe we could acknowledge the inequity of local school financing that results in sending rich students to good schools and poor kids to weak schools? Perhaps politicians could stop demonising universities and taxing their endowments? What if we could respect human capital as much as financial capital?”
One reason why the Pakistani economy has done so poorly after the golden years of Ayub Khan is that those in power have paid little attention to giving resources to poor communities for improving the educational system. In a detailed conversation I had with Pakistan’s first military leader a few months before he died of a heart attack, he rightly put emphasis on building the capacity of local communities to manage their own affairs. “This became possible when I built the system of local government that I correctly called ‘basic democracy’,” he told me.
This was a multi-tiered system of local governance which had members at the lowest tier – the Union Councils – directly elected by the people. In what was then West Pakistan, there were 40,000 Union Councilors. For a couple of years, I managed West Pakistan’s Rural Works Program that received funding from what was called PL-480, an American law that gave resources for development the government owed the Americans. In Pakistan’s case, PL-480 funds were the payments due to the Americans for the wheat they had sold in Pakistan at a time of extreme shortage of the food crop in the country.
The programme I developed gave money to the Union Councils for financing small projects the community needed. Included in the portfolio were small buildings such as primary schools, rural clinics, community centres and farm-to-markets roads. The Ford Foundation placed a couple of foreign advisers – an American and a British – in my Lahore office who had expertise in rural development. They helped me develop and manage the programme and contributed to the annual reports my office issued. They traveled with me when I visited the programme projects all over West Pakistan. In my above cited conversation, President Ayub Khan mentioned the programme I had managed as an example of why outside experts had such a positive view of the country’s economic and social progress during the eleven years (1958-1969) he was Pakistan’s president.
A book authored by Gutav F Papanek, who went back to Harvard University to teach development economics after serving as adviser for several years in Pakistan, received a great deal of attention in academic circles when it was published in 1967. My own work on West Pakistan’s Rural Works Program, written while I was engaged in graduate studies at Harvard University, was published to good reviews by the university’s magazine Public Policy. In it, I developed the concept that those managing a programme such as the one of which I was the director had to be always alert to the fact that powerful forces in rural communities would always try to twist the programme’s objectives to produce favourable results for them rather than for the communities at large.