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Emma Richardson
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This piece made the reality of economic development and its related policies much more individualized and realistic. The use of case studies, especially those of China and Latin American countries, displayed that the commonly discussed policies for sparking economic development, namely those comprising the Washington Consensus, are not always most effective. This paper succeeded in giving context to the quest for economic development. China has had remarkable growth and development while adopting ideas that are the antithesis of the Washington Consensus. Instead of providing “free markets and sound money,” China controlled economic output and worker locations while preventing private property ownership. What worked for China may not work for everyone, but the policies enacted fit their circumstances beautifully. Latin American nations, on the other hand, deregulated, liberalized, and privatized their economies yet have “reaped so little growth benefit out of it.” This paradoxical result is difficult to explain, but some chalk it up to the dramatic pendulum swing being too chaotic given that they were so invested in ISI shortly before. Once it again, we see that the Washington Consensus policies may not be best for everyone. I feel that this paper explains the dilemma of the Washington Consensus in a similar way to how we discussed the Marshall Plan. The Marshall Plan couldn’t be applied to other countries outside Europe because they did not have the infrastructure and human capital prerequisites. The Washington Consensus assumes that the things that make another country tick are the same things that make the US tick, which is almost never the case.
Toggle Commented Oct 3, 2018 on ECON 280: Rodrik Paper at Jolly Green General
I really enjoyed this piece. Several points were made in this paper that I found powerful: models are silly and unrealistic in many ways, models are fundamentally needed for economics ideas to be taken seriously, people think of the world in models (and thus there is no alternative for them), and that assumptions in models for science are more accepted than assumptions in models for hard sciences. As a part-time student of economics, I have always struggled with the crazy assumptions that are made in models. There is pretty much never a situation with perfect competition or a logical consumer; anything you do to reduce the world to two axes is utterly ridiculous. I appreciated that Krugman empathized with Hirschman regarding the silliness of models and felt that this stance added to the paper’s value. Another point that I had not previously considered with much effort was the importance in economics for something to be modeled. Despite being a senior with many econ classes under my belt, I had never given much thought to the ability of each econ concept to be modeled. Taking a step back now, I am able to see why concern about an unmodeled idea might arise. The point made about humans thinking of the world in models really hit home for me. It is so obvious that I had previously never considered this point (much like my attitude towards models used in economics). It would be ridiculous for humans to try to understand the world in its whole form when it is so much more easily digestible in bits and pieces. This once again reaffirms why so much importance was given to models in the 1960’s and 1970’s. The last point that really stood out to me was the one regarding differences in acceptance of assumptions for models in social and hard sciences. As Krugman described, “when it comes to physical science, few people have problems with this idea. When we turn to social science, however, the whole issue of modeling begins to raise people’s hackles.” For some reason, we are willing to accept the flat dish meteorology experiment, but would never accept the equivalent for social sciences. It’s a provocative comparison, and certainly deserves a greater deal of study.
Toggle Commented Sep 26, 2018 on ECON 280 for Friday at Jolly Green General
I found this paper very interesting, especially the points made about export-led policies and unnecessary protectionism. In this global age, it makes sense that being a greater participant in the global market would lead to great economic success. I really liked the anecdote about South Korea and Taiwan and their transition away from the import substitution model. I had only previously heard about the import substitution model in a Latin American history class, so seeing it in this starkly different context was provocative for me. The paths of South Korea and Taiwan have given me greater hope for countries previously retarded by the import substitution model. This economic transition embodies the two ideas I mentioned: export-led policies and unnecessary protectionism. I have always thought of ISI as unnecessary protectionism, but considering it as an “anti-export-led” policy has given me a new perspective. The segment on Argentina, one of the development laggards in this piece, was also very interesting to me. The unsuccessful efforts of the Argentine government to control every aspect of the national economy demonstrates the negative effects of unnecessary protectionism. I remember from my Latin American history class that in Argentina, the political pendulum swung widely from one side to the other. This political instability fed into other development-retarding factors such as corruption and government misallocation which still hurt Argentina to this day. Argentina’s recent economic problems are certainly frustrating, especially given the pro-business attitude of the president. It will be fascinating to see if export-led policies can ever succeed in Argentina as they did in Asia.
Toggle Commented Sep 20, 2018 on ECON 280 for Friday at Jolly Green General
My initial reaction to this reading was positive. In line with what Megan and Maggie have said, it is very useful to look to the successes and failures of the MDGs when considering implementation of the SDGs. History doesn’t tend to repeat itself, but it certainly rhymes. I agreed strongly with the triple bottom line approach suggested as well as the point to involve the private sector more fully and was confused about the contrasting successes and failures of leaving the goals as voluntary. The triple bottom line suggested was simple yet profound. It should come as no surprise that economic development, environmental sustainability, and social inclusion are endlessly intertwined. It only makes sense that these ideas be addressed together for the greatest possible outcome. Regarding social inclusion, fairness is an idea that Adam Smith believed was integral to a successful market environment and investments in women have been some of the best catalysts for developing countries. For these reasons, social inclusion is perhaps the most important part of this bottom line, despite it being listed last. Sachs did a great job of illuminating the huge opportunity cost of not really involving the private sector in the MDGs. As was explained elsewhere in this piece, with burgeoning economic development comes a reduced role of aid. In other words, there is less and less benefit to throwing money at this issue. While I feel that the ways the private sector could involve itself in developing countries should have been more thoroughly explained, I understand part of the attractiveness of this paper is its condense nature. CSR is becoming more and more necessary for businesses to maintain the consumer’s respect. As part of businesses CSR activities, there should be a bigger push to reach out internationally, in my opinion. The voluntary nature of the MDGs is listed as both a success and a failure, which threw me for a bit of a loop. I understand that these rules gained some support for their moral/practical tone, but ultimately there was not global action because this was an optional task. I think that for something as serious as economic development, there should be legally binding goals.
Toggle Commented Sep 13, 2018 on ECON 280 at Jolly Green General
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Sep 13, 2018