Rural Change in the Kosi River Basin: A Capital Goods Perspective

Abstract

This paper sets out to reflect on research in the early 1970s to develop a policy model in the Leontief macroeconomic tradition for the Kosi command area, and investigate the relevance of such models to today’s policy debates for the overall Kosi River basin. The earlier research was set in the context of the ‘generation of problems’ arising from the Indian Green Revolution. Many of the debates at the time concerned policies for the promotion of capital goods in rural areas, such as different types of irrigation technologies, tractors, harvesters, threshers and processing technology, and policies to encourage rural industries to support alternative patterns of rural mechanization. The authors describe the academic and fieldwork contexts of the earlier research; then, in order to ground this paper in a contemporary context, the authors briefly describe the spread of some capital goods in recent years on both the Nepal and Bihar sides of the Kosi river Basin. The authors then review contemporary literature to see what academic research is being done now on the Kosi River basin and find a large hydrology and socio-economic literature. However, as far as the authors can tell, this research is not focusing on macro Leontief economic modelling for policy purposes or on studies to understand the spread of rural capital goods and the growth of small and medium rural industries. The authors conclude by suggesting that Leontief economics needs reviving together with cost-effective field studies of the spread of rural capital goods and the growth of associated rural industries.