Nayyar, Deepak
Working Paper
Rethinking Asian Drama
WIDER Working Paper, No. 2018/150
Provided in Cooperation with:
United Nations University (UNU), World Institute for Development Economics Research
(WIDER)
Suggested Citation: Nayyar, Deepak (2018) : Rethinking Asian Drama, WIDER Working Paper,
No. 2018/150, ISBN 978-92-9256-592-3, The United Nations University World Institute for
Development Economics Research (UNU-WIDER), Helsinki,
https://doi.org/10.35188/UNU-WIDER/2018/592-3
This Version is available at:
http://hdl.handle.net/10419/190197
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WIDER Working Paper 2018/150
Rethinking
Asian Drama
Deepak Nayyar*
December 2018
* Jawaharlal Nehru University, New Delhi, India, email: nayyar.deepak@gmail.com.
This study has been prepared within the UNU-WIDER project ‘Asian Transformations: An Inquiry into the Development of
Nations’.
Copyright © UNU-WIDER 2018
Information and requests: publications@wider.unu.edu
ISSN 1798-7237 ISBN 978-92-9256-592-3
Typescript prepared by Gary Smith.
The United Nations University World Institute for Development Economics Research provides economic analysis and policy
advice with the aim of promoting sustainable and equitable development. The Institute began operations in 1985 in Helsinki,
Finland, as the first research and training centre of the United Nations University. Today it is a unique blend of think tank, research
institute, and UN agency—providing a range of services from policy advice to governments as well as freely available original
research.
The Institute is funded through income from an endowment fund with additional contributions to its work programme from
Finland, Sweden, and the United Kingdom as well as earmarked contributions for specific projects from a variety of donors.
Katajanokanlaituri 6 B, 00160 Helsinki, Finland
The views expressed in this paper are those of the author(s), and do not necessarily reflect the views of the Institute or the United
Nations University, nor the programme/project donors.
Abstract: Gunnar Myrdal published Asian Drama in 1968, a work which made important analytical
contributions to our understanding of development but was deeply pessimistic about Asia’s future
prospects. Since then, contrary to Myrdal’s expectations, Asia’s development has been remarkable,
although transformations have been uneven across countries and unequal between people. This
paper explains the conception and design of the UNU-WIDER study on Asian Transformations,
which seeks to analyse the amazing story of economic development in Asia over the past 50 years.
It begins with reflections on Gunnar Myrdal, the author, and rethinking Asian Drama, the book, in
retrospect 50 years later. It goes on to outline the rationale and objective of the study. It then
discusses some critical issues and lessons that emerge—diversity in development, history and
context, economic growth and structural change, wellbeing of people, markets and governments,
economic openness, and institutions and policies—to serve as a teaser. It concludes with some
brief reflections on Asia’s future prospects over the next 25 years.
Keywords: Asian Drama, development, governments, Gunnar Myrdal, history, industrialization,
institutions, markets, openness, transformations
JEL classification: B20, B31, B41, O10, O20, O53, O57, P50
Acknowledgements: I would like to thank Ronald Findlay, Rajeev Malhotra, Sudipto Mundle,
Frances Stewart, and Finn Tarp for helpful comments and suggestions on a preliminary draft of
this paper.
1
1 Introduction
Gunnar Myrdal published his magnum opus, Asian Drama: An Inquiry into the Poverty of Nations, in
1968. The 50 years since then have witnessed a remarkable economic transformation in Asia—
even if it has been uneven across countries and unequal between people—that would have been
difficult to imagine, let alone predict, when Myrdal and his associates completed their work. The
UNU-WIDER study, in two volumes, analyses the story of economic development in Asia
spanning half a century (see Nayyar 2019a, 2019b). This paper explains the conception and design
of the study for the reader. It begins with a discussion on Gunnar Myrdal, the author, and Asian
Drama, the book, as a point of reference. It then sets out the rationale and the objective of the
study, to outline its structure and framework. This leads into a discussion, illustrative rather than
exhaustive, of some important ideas and lessons that emerge, which might serve as a teaser. A
short afterword on future prospects concludes.
2 Gunnar Myrdal and
Asian Drama
Gunnar Myrdal was a man of many parts. The word polymath is an apt description, which might
not suffice to describe a man who was a distinguished academic, policy practitioner, member of
parliament, cabinet minister, international civil servant, political actor, public intellectual, and
concerned citizen.
1
This diversity of experiences shaped his work and thinking.
In academia, Stockholm University was his institutional home (1933–50). He started as a brilliant
theorist, a brash young academic
2
who went on to question the methodological foundations and
ideological underpinnings of economics, returning to his ivory tower at Stockholm University
(1962–67) where he founded the Institute for International Economic Studies. He was awarded
the Nobel Prize in Economics in 1974. In professional life outside academia, he turned to political
economy and developed the idea of counter-cyclical macroeconomic policies in the early 1930s.
There was an interregnum of four years (1938–42) when he lived in the United States to study the
‘Negro Problem’. He returned home to political institutions in the 1940s when he chaired a
committee that outlined the elements of the post-war Swedish welfare state, to become a member
of parliament, Chairman of the Planning Commission in Sweden, and Minister for Trade and
Commerce. During the Cold War era, he was appointed Executive Secretary of the United Nations
Economic Commission in Europe, where he served from 1947 to 1957. The next 10 years were
devoted to his study of Asia, during which he spent four years in New Delhi, where his wife, Alva
Myrdal (sociologist, diplomat, and politician, who was awarded the Nobel Peace Prize in 1982),
served as Sweden’s Ambassador in India from 1955 to 1961.
There was also a remarkable intellectual journey that ran in parallel, with many milestones and
some landmarks. Three deserve mention for their common purpose—critique of systemic biases
and implicit values in economic thinking—and for their diversity of subjects: politics in economics,
1
For accounts of Gunnar Myrdal, the person and his life, see Streeten (1990, 1998), Bok (2005), Appelqvist and
Andersson (2005), Barber (2008), and Kanbur (2018).
2
Gustav Cassel, whom he succeeded as Chair in Political Economy at Stockholm University (1933–39), once warned
him against his brashness, ‘Gunnar, you should be more respectful to your elders, because it is we who will determine
your promotion.’ Yes, the young Myrdal replied, ‘but it is we who will write your obituaries.’ After Cassel’s death, he
did indeed write his obituary (Streeten 1990).
2
race in society, and poverty in the world. The Political Element in the Development of Economic Theory
was published in Swedish in 1930, in German in 1932, and in English, translated by Paul Streeten,
in 1953. An American Dilemma: The Negro Problem and Modern Democracy, for which he spent four
years in the United States, was published in 1944.
3
Asian Drama, on which he worked in India for
four years and in Sweden for six years, was published in 1968. Yet, the book was also influenced
by the evolution of Myrdal’s thinking in economics and the social sciences over a lifetime.
In this magnum opus, the fundamental point of departure from conventional thinking was the
conviction that ‘economic problems cannot be studied in isolation but only in their own
demographic, social and political setting’ (Myrdal 1968: ix). The book and its approach are best
described in the author’s words from the preface:
It is not an altogether pretentious metaphor when I describe my endeavour to
apply an institutional approach in this study as an attempt to analyze the
development problems of South Asia in a manner that Adam Smith studied
England’s development problems two hundred years ago… The length is
abominable. The question can, indeed, be raised why I did not break it up into five
or six books… But the central idea in the institutional approach is that history and
politics, theories and ideologies, economic structures and levels, social
stratification, agriculture and industry, population developments, health and
education, and so on, must be studied not in isolation but in their mutual
relationships. (Myrdal 1968: x)
The title, Asian Drama, was deceptive in terms of its country coverage. Its focus was on the
erstwhile British India, made up of India, Pakistan, and Ceylon, the sub-continent now described
as South Asia. Burma and Indonesia were paid some attention. But Malaysia, the Philippines, and
Thailand were grouped together as the rest of Southeast Asia, while Cambodia, Laos, and South
Viet Nam were touched upon when some information of interest was available. It is interesting,
although somewhat puzzling, to note that Myrdal described all of these countries broadly as South
Asia even if many of them are now seen as part of Southeast Asia.
4
However, Japan, Korea, China,
Formosa (Taiwan), Hong Kong, and Singapore were excluded. So was West Asia. And, it is no
surprise that the Central Asian economies, then part of the USSR, were also excluded.
Gunnar Myrdal set out a conceptual framework and an analytical approach to study the constraints
on, and possibilities of, development in Asia at an early stage of the post-colonial era, when
experience in terms of outcomes was limited. Some important points of departure from studies of
development at that time, which reflected his methodological concerns, are set out explicitly in the
prologue, titled ‘The Beam in Our Eyes’. It begins with a plea for the sociology of knowledge, to
emphasize the importance of a multidisciplinary approach in social sciences, the recognition of
many biases in the study of development, the critical role of institutions, and the necessity of
making assumptions, priors, and values explicit. The implicit critique of mainstream economics
had three dimensions. First, the essence of the institutional approach is to use all relevant
knowledge to analyse a problem, unconstrained by the boundaries of disciplines, because in an
interdependent social system there are only problems that are not simply economic, social, or
3
Economic Theory and Underdeveloped Regions, published in 1957, was early thinking about development, while Value in
Social Theory, critical essays on methodology written earlier, translated into English, and edited by Paul Streeten, was
published in 1958. For a more detailed discussion on Myrdal’s academic writings, see Kanbur (2018). See also Streeten
(1998) and Barber (2008).
4
This description is illustrated by a map of South Asia in Myrdal (1968), which includes all the selected countries
(volume 1, 4–5). The scope and coverage of the study is also set out in the text (volume 1, 39–41).