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Matthew Jones
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Much like other topics that we have discussed so far in Development Economics, Climate Change puts a disproportionate share of the impact on the world’s poor. Despite all the progress economic development has had in the past several decades, climate change threatens to undo a significant portion of it. Thinking about the recently formed Sustainable Development Goals, many of the targets are going to be even more difficult to achieve with a rapidly changing climate. No one stands to benefit, but the fact that an unequal amount of burden will be placed on the poor perhaps explains why little is being done to curtail the potential rise of our earth by 4 degrees Celsius. Members of the developing world already have inadequate access to institutions, so how are they supposed to do anything to affect climate change with little to no say on the matter? Personally, I find the article appalling and believe something must be done in order to try and reverse the onset of climate change. However, as of right now there is little being done in the world to prevent people from conducting activities that are detrimental to the environment. Furthermore, there is no doubt more that can be done in the advanced technological world that we live in to contribute less as a population to climate change. Clean energies like solar panels and wind turbines could play a vital role in reducing the effects of climate change, but when the countries that have the means to harness these forms of energy are unlikely to experience the worst effects of climate change, it is unlikely any change on the matter will occur. The only way to reverse climate change and prevent the developing world from bearing a majority of the costs associated with it will be by enforcing punishments for contributing to the change.
My basic understanding of trade through my background in Micro and Macroeconomics led me to believe that trade was most certainly beneficial for poverty reduction to the presence of comparative advantages. However, the paper by Singh and Le Goff clearly highlights that trade can only be beneficial if certain factors accompany the openness of trade. Here complimentary policies are needed to facilitate the benefits of trade, but often times these policies are neglected. Here is where the most interesting part of development economics arises for me: decisions regarding the particular usage of policy. Countries will surely witness different results with similar policies, so the difficulty becomes deciding which policies will actually work. The multitude of ways in which a country can stimulate development through the coordination of policy with trade liberalization ultimately circles back to the particular need to treat development on a country by country basis. In such a case, trade liberalization may not even be the best policy prescription if the results of such a policy are contingent upon other factors. Thinking more about trade liberalization in the context of the recent election, it will be interesting to see if closing our borders to trade has any effect on bringing back jobs as Trump desires. Will the increase in potential jobs coming back to the US outweigh the loss from being able to buy goods at a lower price due to comparative advantage? Or will closed borders have more negative effects than good?
Toggle Commented Nov 30, 2016 on Reading for Thursday at Jolly Green General
The availability of financial services seems to be of vital importance to spurring development in the developing world. However, the fact that these areas possess little capital and thus little incentive for lending or insurance institutions to arise is absolutely ridiculous. Even though "Latest Findings from Randomized Evaluations of Microfinance" proved that Microfinance can have mixed results based on numerous factors, we still need to ensure the developing world has access to financing institutions. These institutions can have a profound effect on poverty reduction and well-being if they are implemented in the correct manner. The different ways these programs can be implemented in different societies is vital to the understanding of development economics for me. Similar Microfinance policies produced varying results based on the people and societies targeted. The more I learn about development, the more I realize that the importance of an individualistic approach in influencing outcomes of health, economic growth, or Microfinance. The conclusions developed in "Latest Findings from Randomized Evaluations of Microfinance," strongly reinforced the notion that a "one-size fits all" approach simply does not work. We must acknowledge that the developing world is composed of an abundance of cultures and people that ultimately will be affected by similar policies in different ways. Institutions and policies will reap the benefits that we believe they can, the more we are able to implement them in an individualized case by case manner.
Toggle Commented Nov 14, 2016 on Readings for this week at Jolly Green General
Shultz's Nobel Prize lecture only reemphasized the importance of state led intervention programs. This became especially apparent with the discussion of fertile and infertile regions in Africa, in reference to how Schultz noted that even fertile regions along the Nile river remained as unproductive as those that were infertile as well. The low levels in output can thus be explained be low levels of human capital. Here the state must be responsible for facilitating an increase in output by improving the health and knowledge of its own population. Perhaps improved access to credit markets or other government measures through improved roadways , education, and healthcare is the missing link in improved production. However, this cannot be limited to farming, but instead must be generalized for all of society. Looking at women in society, the overall production of an economy is perhaps lower than it could be as well. Here we have a great resource that is often not best utilized. Like the fertile farmland the missing link in utilizing the resource is government led intervention. Empowering women would correspondingly generate a greater output and productivity overall in an economy. Sen's discussion capabilities in the context of development being more important that pure economic growth is reinforced by Sachs' article on malaria. Malaria inhibits a person's full capabilities, making it impossible for development. Sen argues that it is the role of the state to reduce un-freedoms in society. When a society is shackled by development, one could argue that malaria is an "un-freedom." People are unable to live the lives they would choose to live in normal conditions. Thus, it becomes the role of the state to allow people to live as they would like to if they did not have malaria. Working to eliminate malaria is just a single example of the many ways the state can work to eliminate "un-freedoms" that hinder the full capabilities of a society. Eliminating these un-freedoms are the key to improving the output and productivity of a society by allowing it to reach its maximum level of human capital.
Toggle Commented Nov 2, 2016 on Readings for Thursday at Jolly Green General
Esther Duflo's approach to discussing the empowerment of women was especially eye opening after the reading from Amartya Sen and the discussion in class on Tuesday. Her realist sentiment that often reveals the limitations to empowerment in women made her seem like somewhat of a pessimist at times to me. Nonetheless, the countless examples that the empowerment of women can spur economic development resonated the most with me. However, in order to empower women, we must first work on eliminating the pre-conceived gender roles of women. You often hear that a woman is confined to the "kitchen" or "bedroom." You also hear jokes about women making a sandwich or cleaning. I think these perceptions of women ultimately limit the true abilities of empowerment. How much can a woman advance her own education or career, have a political role in society, or even contribute to household decision making if society has these preconceived conceptions about her? I think ultimately we must remove these incorrect perceptions of women's roles before we can count on the full effect of their empowerment to be realized. In addition to society accepting women as equal members, we must first make sure women are aware of their own equality. One of my friends who studied Psychology at VCU has gone on numerous trips to India in order to educate women of their own rights. As we have seen through the readings, women are often significantly overpowered by their husbands in the household. The missions that she has gone on to educated women of their own rights and abilities have had significant effects on reducing fertility rates and improving health, often in slums with awful living conditions. Women are overall an invaluable resource that stand to significantly impact and assist the process of development, so it is about time we realize that for the betterment of our own society and world.
Toggle Commented Oct 19, 2016 on Reading for Thursday at Jolly Green General
Rodrik highlights the ability of China and other East Asian countries to develop significantly in the decades of the late 20th century. The main point he stresses is economic growth, which is certainly the point of his essay. However, my question concerns the happiness and well-being of those people in light of the sometimes restrictive government regulations used to promote that growth. He mentions farmers in China who are required to meet a state quota of produce by first giving x number of crops to the state, and then being allowed to sell the excess at the market for a profit. However, a policy likes this restricts a person's free will. This relates back to Sen with the belief that development is a product of freedom. There is no freedom in mandating what people do with the fruits of their own labor and hard-work. Furthermore, the restrictions Rodrik mentions in the amount of land people can own in China based on the size of their family further prevents access to acquiring land in the way that people in a free-market economy could do so easily. I do not doubt the effectiveness of the restrictive policies used in Asia to ensure economic prosperity, but I am unable to agree with the success of the development in light of the restrictions employed. Examining "Development as Freedom" as Sen does would suggest that development has failed to occur with restrictions in basic freedoms. The people may be better off financially, but perhaps they are worse off due to the restriction of free will. I think this is where the big question arises: how much free will should we be willing to sacrifice in order to ensure economic prosperity and economic development? Maybe it is okay then to sacrifice a little free will and our ability to participate in an unregulated market if it means that as a whole our country can improve. With the development of the economy in China, living standards have no doubt also increased. This can include nutrition, shelter, perhaps more happiness with more spending money, and more than likely a better overall well-being. Thus, maybe big government restrictions are not such a bad thing after all if they are employed in the right manner.
Toggle Commented Oct 5, 2016 on Reading for Thursday at Jolly Green General
The mistakes in economics, in particular to ignore high development theory for several decades only to return to the thought, reveals several lessons to me. Thought is often going to be ahead of modeling, as it should be. Great thoughts may arise, but often times the numerical support to "prove" the thought may not be present. Thus, I believe that too much emphasis is often placed on models over thought. The prediction that complex models reveals can often dictate political policy that is used in practice, but these predictions are not always correct. Sometimes, we must step back and examine things in a logical manner of reasoning. In reference to the high development theory, I think the idea that "modernization breeds modernization" simply makes sense. Even though it took several decades for a model to be generated, the idea should not have been completely ignored until the model was formulated. By examining this idea in nature, maybe the concept can be displayed more clear, but by ignoring the thought entirely, it was a loss to the expansion of the discipline of development economics. With this being said, ideas cannot be examined with such a narrow-minded perspective. Examining surrounding factors can often illuminate some such trait that would make this inconceivable idea conceivable. Thus, often times the best perspective to take may be the simplest one. When you think of traditional ways to increase development, GDP/capita stands out, yet a number of complex factors go into this equation with the fact that markets are not entirely perfect. Here, one is able to draw comparisons to Sen. To say that development should focus on capabilities is quite simplistic, yet it took many years of complex models failing to provide an adequate solution. In today's world we can see that improving capabilities in turn does an amazing job in alleviating the problems of developing countries. Thus, from this realization shows complex phenomena can often be solved through simplistic manners. Examining something with from a complex perspective makes economics more difficult than it needs to be.
Sen's tendency to discuss the limitations of freedoms in not only developing countries, but also countries that are considered "Developed" stuck out as one of the most important topics in the first two chapters. In particular, Sen mentioned how African American males have lower life expectancies than males in China and Indians in Kerala. These differences are remarkable too considering that African American males are 15% less likely to live to 75 than their white counterparts in the United States. Sen discusses capabilities and how capabilities are vital to fueling development in impoverished countries around the world. However, this data regarding African Americans in the United States is absolutely appalling! Here we are in our own country, and it is evident that African Americans are experiencing a development disadvantage perhaps from a capability standpoint. We worry so much about helping other impoverished countries around the world that we sometimes neglecting helping these people that are our fellow Americans. I am not suggesting than any life is more valuable than another, but in terms of proximity, it would certainly be much easier to affect the lives of people who live in your own country, state, or city versus helping people that are a world away. Many of the programs in Richmond that aim to alleviate poverty actually take this approach centered around capabilities that Sen discusses. For instance, on the Volunteer Venture trip I took as a first year to Richmond, we visited various community centers that aimed to improve quality of life through stressing education, providing healthcare, and teaching people about proper nutrition. These community centers a lot of times targeted the youth in order to have a significant effect on a child's development. In particular, they provided a place for children to study and receive tutoring, in addition to learning about how to properly fuel their bodies. Many of these kids live on fast food and junk food, while also neglecting their school work, often times because of bad situations at home or distractions elsewhere. By influencing their lives in education and nutrition, these centers are developing and improving their capabilities. They create better educated and more healthy kids that ultimately give them a chance to break the chain of poverty and crime that has been occurring for decades. These programs work because they give kids a chance of hope as well, improving their self-esteem with an increase in their capabilities. Sen's approach to improving capabilities in order to encourage economic equality simply makes sense. If you have better functioning people they will be more productive members of society, able to contribute, and able to come out of poverty.
"The Economic Lives of the Poor" illuminates the significant problems the poor and extreme poor face, and while some of these problems are complicated, they still have solutions. Amartya Sen discusses in our textbook the importance of being healthy in terms of escaping poverty, yet a majority of the people studied by the authors have poor eating and poor nutrition habits. Coupled with the fact that most impoverished people then get a lackluster education, they probably do not truly comprehend the importance of being a healthy person. As a whole, Banerjee and Duflo found that the poor are malnourished, partially because of spending habits. The fact that a lot spend more on inefficient calories by purchasing products like tobacco and alcohol instead of efficient and nutritious calories reveals a lack of education to me. Even though malnourishment does not appear to be a leading concern from the impoverished people themselves, it affects their well-being. Perhaps by educating the poor how to better fuel themselves, we could create a more productive impoverished people. The authors revealed how government run public schools often provide an inadequate education. However, by better educating our poor as children on nutrition and health habits could we potentially improve their overall well-being, and fuel more output, thus increasing their chance to escape from the chain of poverty they are be stuck in? I believe so. In all the problems the poor face in their lives, the overall lack of knowledge and not knowing how to spend their money properly seems to be the overarching reason as to why they remain unhealthy and unable to escape poverty. By helping governments reform their education and healthcare systems in a manner that would help to teach the poor more how about improving their overall health, the potential to positively influence the cycle of poverty exists.
Toggle Commented Sep 14, 2016 on ECON 280 Reading for Thursday at Jolly Green General
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Sep 14, 2016