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Heeth Varnedoe
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Krugman’s discussion of the “Fall and Rise of Development Economics” provides powerful insights into the nature of economic modeling and development theory. As a student of economics, models can often be frustrating, particularly the assumptions that are imbedded in every model. However, like Krugman’s dish pan example illustrates, there are real insights that can be gained from a seeming oversimplification of reality. While this paper primarily deals with the history of development economics and its almost half-century dive into obscurity within economic literature, I think that it highlights one of the most fundamental challenges pertaining to development and development theory: human behavior and markets are often unpredictable and do not always exhibit the behavior that theory dictates. There are countless examples pertaining to international development where a model would predict a certain behavior or outcome, but we observe the opposite or an unforeseen outcome. For example, many people might assume that providing people with mosquito nets for free would produce better health outcomes and make people more productive in the economy. However, there have been instances in which such a service was provided and people simply did not use the nets or used them for purposes other than personal protection from mosquitoes. The unpredictability of human behavior is perhaps one of the greatest challenges for identifying effective development mechanisms. For this reason, I find the work of Esther Duflo to be extremely fascinating, as she has pioneered the method of Randomized Controlled Tests to help policymakers glean real insights about human behavior and make better informed development decisions.
Toggle Commented Sep 27, 2018 on ECON 280 for Friday at Jolly Green General
Wang et al.’s discussion of institutional barriers and effective development strategies provides a crucial insight into the important role that institutions play in promoting or hindering development. My coursework at Washington and Lee has convinced me that proper institutions are the most important contributor to development—more so than other contributors such as natural resources, geography, and climate. This particular article made me think about the role that colonization may have played in establishing the institutional framework for many of the poverty trap and lag behind countries. While some of the growing successful economies were indeed colonized, I cannot help but wonder if many of the struggling countries are maintaining some remnants of the extractive, corrupt institutions established by a colonial power. This article also highlights important questions pertaining to development policy for entities like the World Bank. It is difficult and perhaps problematic for developed nations to change the institutions within struggling nations, but on the other hand, this article and the broader literature all seem to suggest that policies such as protectionism are an impediment to sustainable development. Development organizations will need to identify proper mechanisms to identify ways to increase institutional capacity and effectiveness in the third world that is respectful of those nations’ sovereignty. I find the case of Mauritius to be extremely fascinating, as it is a small, island African nation. While dependence on agriculture is an impediment to development for many of the African nations, Mauritius was able to establish itself as a player in the global sugar market and use that revenue to leverage itself into a service, based tourist economy.
Toggle Commented Sep 20, 2018 on ECON 280 for Friday at Jolly Green General
Sachs’s discussion of the sustainable development goals (SGDs) gives crucial insight into the challenges that sustainable economic development will face over the next half century. The SGDs identified by the UN will likely play a crucial role in increasing human wellbeing across the globe. Given President Trump’s attitudes toward sustainability and the developing world as evinced by his deregulation, withdrawal from the Paris agreement, and remarks concerning some developing nations, I fear that the United States may not be committed to supporting the achievement of these goals. While the impact of climate change will be felt all around the world, developing nations will suffer the most. Furthermore, developed nations and emerging economies such as India and China are responsible for most of the world’s emissions. If the United States does not take an active leadership role in promoting sustainable development, other countries will likely see no incentive to contribute their resources to these goals. Sustainable development will be a difficult task, as often times sustainable practices drive up costs and can act as a hindrance to the economy. But Sachs correctly points out that in the coming years there likely will be no genuine development if it is not also moving toward a more sustainable planet. It will be a difficult task for policymakers to identify the appropriate mechanisms for development that serve the dual purpose of promoting economic development and sustainability. Despite these challenges, the SGDs are important nonetheless. While a critic may argue that the goals lack specificity, they have an inherent value as an articulation of humanity’s potential to improve well-being and expand human capacity around the world.
Toggle Commented Sep 13, 2018 on ECON 280 at Jolly Green General
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Sep 13, 2018