CASTE AND DEVELOPMENT

DAVID MOSSE
Abstract

This article explains that caste identity significantly impacts people's life opportunities,
particularly in India, but is often ignored in global development discussions. While caste is
seen as a historical issue, it continues to shape social and economic inequalities, especially
after India's economic reforms in the 1990s. Scholars from various fields have studied caste's
role in rural poverty, urban jobs, and business. The article argues that caste still creates
advantages for some and disadvantages for others, leading to inequality. It calls for policy
changes to tackle caste discrimination in both formal and informal sectors and urges global
attention to this issue.

Introduction

The article discusses how caste, though a major factor in inequality, is often ignored in global
development policies like the SDGs. It highlights that caste-based discrimination affects 20-
25% of the world's population, particularly in South Asia. Despite being prohibited by human
rights law, caste discrimination is rarely addressed in global policy debates.

In India, caste is a key factor in poverty and inequality. Higher castes control most wealth,
while lower castes, such as Dalits, often work as laborers. Studies by thinkers like B.R.
Ambedkar and Deshpande show that caste still strongly determines life opportunities. Caste
also intersects with other factors like gender and class, making poverty more complex.

The article explores caste's historical roots, its role in rural and urban economies, and its
impact on labor markets and businesses. It concludes that caste remains a powerful force in
economic life, and calls for greater global attention to caste in policy discussions.

2. Caste in Indian Social Policy

(a) Caste as a Cultural and Religious Issue

Caste is often treated as an old cultural and religious problem in India, rather than a
continuing cause of inequality. After India gained independence, the government didn't focus
on caste as a major issue of poverty or inequality, assuming it would disappear with
modernization. The Indian Constitution, however, acknowledged the historical disadvantage
of certain castes (like Scheduled Castes, or SCs) and offered them special protections, like
affirmative action (reservations) for jobs and education. But caste is still seen by many as a
cultural issue, not one of economic inequality. Even though caste-based violence is illegal,
everyday caste discrimination remains, often overlooked in economic policies.
(b) Caste and Politics
Caste has become deeply connected to politics in India. Affirmative action policies expanded
beyond SCs to include Other Backward Classes (OBCs), affecting around 52% of the
population. This shift brought caste into political debates, especially as caste-based political
parties gained power. However, this focus on caste in politics often ignores its role in the
economy. Many upper-caste people argue that caste should no longer be a concern in
modern India, viewing it as a cultural issue. At the same time, the rise of anti-caste activism,
particularly from Dalits (historically oppressed castes), has brought attention to caste
discrimination in the modern economy, calling for change beyond just quotas.

This debate reflects a divide: on one hand, caste is seen as a cultural and historical issue; on
the other, it remains a powerful driver of social and economic inequality, which is often
ignored in broader development policies.

3. Village Ethnography

This passage discusses the concept of caste in India, focusing on its historical development
and social implications, especially in village life. Scholars agree that caste is a mix of various
historical factors, and it evolved over time, especially from the 17th century with the growth
of trade, militarization, and British colonial rule. The British influenced caste systems through
revenue policies, population censuses, and political systems, which shaped how caste was
understood and categorized.

Early anthropologists in the 1950s saw caste as a ranked system, with each caste having a
specific role, such as priests, farmers, and artisans. Some scholars like Dumont (1980) viewed
caste as a hierarchical system based on purity and pollution, where Brahmins (priests) were
the highest, and "untouchables" were the lowest. This model focused on ritual and purity but
was criticized for ignoring the economic and political dimensions of caste.

Caste also played a role in local economies, where service castes like potters and barbers
performed essential tasks for landowners, but with the rise of markets and new technologies,
these roles became less important. Many Dalits (those in the lowest castes) sought autonomy
through market jobs and other ways of escaping caste-based discrimination.

In modern times, changes in the economy and politics have led to some progress for Dalits,
with improvements in income and social mobility. However, caste-based discrimination still
persists, especially in rural areas, where Dalits are segregated and excluded from public
spaces. Some Dalit leaders have fought for their rights, but caste-based inequalities remain
deeply ingrained, often intensified by education and political competition. Caste, though less
rigid than before, continues to impact social relationships and perpetuate inequality.

Rural development: Caste and economic inequality

This section talks about how caste affects economic inequality in rural India, focusing on how
it influences access to jobs, resources, and opportunities.
 1. Past Impact: Studies since the 1950s show that caste has influenced who benefits from
new opportunities. During the Green Revolution (1960s-80s), richer, upper-caste farmers
benefited from new farming technology, while lower-caste Dalits working as laborers did
not (Breman, 1974).
2. Changing Power: In recent years, agriculture has become less important, and upper-caste
elites are stepping back from village politics. Power is now in the hands of brokers who
help people access resources like jobs and loans (Gupta, 1998).
3. Caste and Economic Inequality: There are mixed findings about how caste impacts
economic inequality. Some studies say inequality is more about household differences,
not caste (Himanshu et al., 2013). Others say Dalits still face difficulties getting resources
like credit or fair access to markets (Thorat, 2017).
4. Government Help: Dalits have gained from government programs that provide
education, healthcare, and job opportunities (like NREGA). These programs improve
wages, but sometimes also cause caste tensions (Carswell & De Neve, 2014b).
5. Discrimination: Dalits still face caste-based discrimination in public services like
healthcare and food distribution. For example, lower-caste children experience
mistreatment from health workers (Acharya, 2010; Thorat & Lee, 2010).
6. Caste Violence: When Dalits improve their lives, they often face violence, like hate crimes
or attacks on their property, from other castes who feel threatened (Sharma, 2015).

In short, caste continues to play a big role in economic inequality, even as Dalits get more
opportunities to improve their lives.

Caste in the urban labour market

1. Dalits and Urban Migration: Many Dalits move to cities for better work opportunities,
hoping to escape the hard, humiliating labor in villages. While some find a chance to live
and work without caste discrimination, national data shows that Dalits still mostly have
low-status jobs, like manual labor, even in urban areas (Deshpande, 2017).
2. Dalit Women’s Challenges: Dalit women face double discrimination—both due to their
caste and gender. Despite having higher participation rates in the workforce compared to
upper-caste women, they often face poor working conditions and physical mistreatment
(Deshpande, 2017). Prosperity can reduce violence but may also limit their job mobility
and decision-making.
3. Caste and Job Types: Even in urban areas, Dalits are often sorted into lower-skilled, dirty
jobs, like working in garment dyeing or sanitation (Carswell et al., 2017). Upper-castes
dominate higher-skilled and managerial jobs. Dalits are often excluded from these better
opportunities, even when they have lost their land due to industrialization (Bommier,
2016).
4. Caste and Social Networks: Caste plays a big role in hiring and job access. Workers are
often recruited through caste-based networks, and this creates a "super-exploited"
workforce (Shah et al., 2018). This leads to caste-based segregation, where Dalits remain
stuck in low-paying, low-skilled jobs while others advance (Mosse, 2010).
5. Education and Caste Barriers: Education is seen as a path to improve lives, but Dalits still
face caste-based discrimination in schools, which limits their future opportunities. Even
 with education, they earn less than upper-castes. This is especially true in private-sector
jobs, where caste discrimination in hiring is common (Banerjee et al., 2009). Despite their
qualifications, Dalits struggle to break into better jobs.
6. Discrimination in the Job Market: Discrimination happens at two levels: through biases in
hiring and through cultural norms that favor upper-castes. Even if Dalit candidates are
equally qualified, they often face bias and are denied opportunities due to their caste
(Deshpande & Spears, 2016). Caste-based discrimination is found especially in private
companies and specific sectors like call centers (Das, 2013).

In conclusion, caste continues to limit economic mobility for Dalits, despite education and
urban migration, reinforcing inequalities in the labor market.

Caste in the business economy

The section discusses how caste affects Dalits in the business economy, despite the growth in
self-employment since the 1990s. Dalits, often excluded from dominant business networks,
face significant barriers. These barriers are due to caste-based networks, market hierarchies,
and discrimination.

1. Networks and Trust: Caste-based networks are important for business success,
especially in risky sectors where trust is essential. Dalits often have limited access to
these networks, which hinders their business growth (Harriss, 2003; Munshi, 2011).
2. Ranked Markets: Dalits are often restricted to lower-status, physically demanding jobs,
such as waste management or small-scale shops. Higher-status markets, like education or
finance, are harder for them to enter (Harriss-White et al., 2014; Guérin et al., 2015).
3. Exclusion and Barriers: Dalit businesses face prejudice, with caste identity affecting their
reputation and access to resources like capital, markets, and networks. Despite some
growth in Dalit entrepreneurship, they are often seen as laborers rather than business
owners (Prakash, 2015; Deshpande, 2017).
4. Regional Variations: Discrimination against Dalit businesses varies by region. In some
areas, even with high business activity, Dalit participation remains low, showing that local
factors like education and political success don’t fully explain this inequality (Harriss-
White et al., 2014; Vidyarthee, 2016).

In short, caste discrimination continues to affect Dalits' access to business opportunities,

limiting their economic success.

Caste in the post-liberalization economy

The section explores how caste continues to shape the post-liberalization Indian economy,
highlighting both its advantages and disadvantages.

1. Caste as Advantage and Disadvantage: Caste impacts individuals differently—some gain

advantages while others face disadvantages. Harriss-White (2010) notes that caste can
dissolve in some areas (like skills or trust) but still persists in economic structures,
operating both as a barrier and a resource.
2. Caste as a Network: Caste functions as a durable network, providing protection, access,
and resources. Munshi (2016) emphasizes that caste-based networks are crucial for
 access to jobs and business, and these networks discourage migration for better
opportunities.
3. Social Mobility and Caste Networks: Caste networks can limit opportunities for some
individuals, particularly Dalits. Munshi & Rosenzweig (2006) explain that while caste
networks helped Dalit men move into jobs, they restricted their children’s access to
better jobs due to poor education systems. Deshpande (2018) adds that Dalits using
caste networks for jobs may actually fare worse than those who don’t.
4. Caste and the Informal Economy: The informal economy, where most people work, is
heavily influenced by caste. Harriss-White (2003) argues that despite liberalization,
caste, gender, and religion still govern much of the economy, affecting jobs, wages, and
access to resources.

In summary, while caste networks offer support, they can also limit economic opportunities
and mobility, particularly for Dalits.

Affirmative action

The section discusses affirmative action in India, particularly the reservation system, and its
impact on caste inequality in the post-liberalization economy.

1. Affirmative Action and its Limitations: Affirmative action mainly applies to the formal
sector, but caste remains a major issue in informal structures. Deshpande &
Ramachandran (2017) discuss how dominant farming castes like Jats, Patels, and
Marathas demand OBC status due to challenges like agricultural changes and job
competition, but the focus on reservations diverts attention from the informal economy
where caste plays a key role.
2. Effectiveness of Reservations: Arguments against reservations, claiming they are
ineffective or unnecessary, are not supported by evidence. Weisskopf (2004) and others
find that reservations help Dalits and Scheduled Tribes (SC/ST) access education, despite
facing stigma. Deshpande (2016) shows that the stigma doesn’t undermine the benefits,
and reservations do help redistribute opportunities in higher education and jobs.
3. Reservations and Employment: Deshpande & Weisskopf (2014) find that increasing
SC/ST representation in the Indian Railways was linked to higher productivity. Although
reservations don’t eliminate caste divisions, they reduce them in public sector jobs,
unlike private sector jobs, which still rely heavily on caste-based recruitment.
4. Political and Economic Affirmative Action: Munshi (2016) notes that caste-based
political reservations have increased Dalit participation, but often at the cost of
competence and public goods delivery. Vidyarthee (2016) is critical of the shift to
supporting Dalit entrepreneurship through a "diversity paradigm," claiming it benefits a
small Dalit elite and neglects the majority.
5. Positive Outcomes and Criticisms: Some studies show that affirmative action has helped
reduce caste-based inequalities. Hnatkovska et al. (2012) find narrowing gaps in wages
and education between Dalits and upper castes, but Deshpande & Ramachandran (2016)
argue that disparities remain, especially in higher education and top jobs, where the
upper castes have pulled ahead.
In conclusion, while affirmative action has positive effects, it remains limited in addressing
deep-rooted caste inequalities, especially in the informal economy and private sector.

The modernity of caste: Rank, network, identity

This section explores how caste continues to shape society today in various forms, beyond
just traditional views.

1. Caste Beyond Tradition: Caste is not just an Indian or Hindu issue but a broader social
phenomenon, similar to race or ethnicity. It involves hierarchies, discrimination, and
exclusion, as noted by Desai & Dubey (2011) and Tilly (1998). Dalit activists argue that
caste should be included in global discussions on racism.
2. Caste as a Network: Caste can be understood as a network where connections and power
are important. Studies by Munshi (2016b) and Witsoe (2017) show how caste affects
social and economic interactions, often interacting with other social networks like
consumer groups and tastes. Caste is flexible and changes, adapting to new systems like
markets.
3. Caste and Power: Power in caste systems is about who can connect with whom.
Dominant castes use their power to maintain status, while lower castes are often
excluded or prevented from organizing, as shown by Hoff & Fehr (2011).
4. Caste Identity: Caste is both imposed on individuals and something they perform, as it
interacts with other aspects of their identity. Hoff & Pandey (2006) found that Dalit boys
performed worse in tasks when their caste identity was revealed. This shows how caste
affects self-perception and performance.
5. Caste and Dignity: Caste discrimination can lead to feelings of humiliation, especially for
Dalits in universities, which can even result in tragic consequences like suicides.
Deshpande & Zacharias (2013) and Guru (2009) highlight how caste affects Dalit
students’ self-esteem and dignity.

Conclusion

1. Caste and Global Policy: Recent studies suggest caste should be treated as a key identity
in global policy discussions, like gender or race. Caste impacts opportunities across
South Asia and its diasporas. It is linked with other identity factors like gender and class,
which affects jobs, education, and social status. Attention should be paid to caste's
unique features like occupational ranking, exclusion, and stigmatization.
2. Caste and Poverty: Dalits and Adivasis, particularly women, are the poorest in India.
Dalits face restricted job opportunities, lack land, and have poor education. Adivasis
suffer from poor returns on their resources like land and limited access to technology.
Studies by Gang, Sen, and Yun (2008) highlight that Dalits' poverty comes from these
barriers, while Adivasis’ poverty is more due to location.
3. Caste in Development: Caste inequalities affect both rural and urban areas. These
inequalities persist despite industrial development and globalization. Dalits face
prejudice in both salaried jobs ("glass ceiling") and self-employment ("sticky floor").
4. Policy Innovation: There is a need for new policies to address caste discrimination,
especially in informal and private sectors. Global discussions on development should
include caste inequality.