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Alice Chen
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I’ve always seen climate change as an important issue, but I never knew the importance of it from a development standpoint. There were several topics in this reading that stuck out to me that I had never considered before such as tourism and agriculture & social vulnerability to climate change. I found the impact on tourism quite interesting as they mentioned that in Egypt, ocean acidification and ocean warming threatens coral reefs and places the tourism industry under pressure. The tourism industry is an important source of income for the country, and this can place further development in Egypt under stress as they already rank 132/151 in the world for GDP per capita. Reading this reminded me of the Maldives, a country suffering so heavily from sea levels rising that they have resorted to building artificial islands. However, the Maldives is also very reliant on tourism and with the bleaching of coral reefs and sea levels rising so high that they damage the airport, the Maldives would face a significant loss for their GDP based on the tourism sector. Agriculture and imports also get significantly impacted, and they especially impact people who rely on the environment/geography for work. High heat impact not only crops, but also farmers who work outdoors. Dry regions tend to get drier and wet regions tend to get wetter, which can further impact crop growth. This can further widen economic inequality and send people into a poverty trap. I was reminded of rainfall insurance that we read about a few weeks ago, but even with rainfall insurance, this cannot aid people against climate change. Additionally, if people can no longer live in these areas, they would have to permanently migrate elsewhere, which can place significant toll on established cities not ready for the influx of migrants. Those in minority groups, who already have less of a voice, will not have their needs attended to either. Their children may be malnourished and as we know without proper healthcare, people are unable to rise from poverty. So what can we do about climate change? While many nations have pledged to combat climate change, it doesn’t seem like the entire world has taken it as a serious issue yet—or just aren’t doing enough. From living in Shanghai, it was great to see the government slowly implementing policies to reduce pollution, but it still hasn’t been reduced enough to combat climate change in its entirety. So should we have stricter policies? Should we value combatting climate change over a countries own economic development?
Toggle Commented Dec 2, 2019 on Last Blog Post for the Year at Jolly Green General
Parker and Volg’s paper on conditional cash transfers was fascinating to me because I had never thought about using incentives to keep poor children in school. Progresa has significantly increased paid work, decreased agricultural work, and increased weekly hours for men, and also helped keep more girls in school. I thought it was interesting that in this study, older students did not have as much positive effect as the younger students because “the program came too late to undo dropout.” Is there a specific age we should target to help keep them in school? How young do we have to start? I also thought the idea of migration was interesting. When analysing the outcomes for men and women, the authors found that men earned much more than women in the future. However, they explained, this could be attributed to two reasons: migration and mortality. Men are more likely to emigrate from Mexico, and possibly seek a higher paying job elsewhere rather than staying in the country. Mortality was also a concern because there was an increase in homicide mortality. I think migration could be an interesting subject of further study because I’m curious if conditional cash transfers could cause a brain drain from these lower income nations. Though not a conditional cash transfer, as I was reading this paper I was reminded of how in the Netherlands, all families with children receive a “child allowance” to help pay for school fees, clothing and any other costs associated with raising children. This made me wonder if cash transfers had to be conditional, though governments would have to allocate a large amount of money for this to occur. While “child allowance” doesn’t have any impact on keeping students in school, it would be interesting to explore in a developing country.
Toggle Commented Nov 20, 2019 on Next Week at Jolly Green General
I'm going to admit I didn't quite understand many parts of the paper, but I'll try my best to talk about what I did understand. "Interest Rates in the North and Capital Flows to the South" discussed the relationship between industrial-country interest rates and capital flows in emerging markets. The authors found that as interest rates decrease, capital flows to emerging markets increased and vice versa. I think this paper reinforces the idea that economic development is a system: actions taken in a developing country depend on the economic situation in a developed country, but historical and cultural influence also play a pivotal role. We already know that Asian countries did a significantly better job at economic development than Latin American countries, and Latin American countries are more dependent on other nations for aid. This keeps countries in a continuous trap where everything depends on the health of the industrialised nation. Another thing I noticed as I read this paper was how outdated the sources were and I wonder if there are any modern examples that pertain to something I've actually lived through. I did think it was interesting on how the authors looked at lending in the 1920's after WW1. The Federal Reserve kept interest rates low, which encouraged Americans to invest elsewhere. But, this makes me wonder if there are other ways we can encourage people to invest elsewhere instead of simply lowering interest rates.
Toggle Commented Nov 13, 2019 on For Thursday's Discussion at Jolly Green General
The statistics in "The Economic and Social Burden of Malaria" were quite shocking and it's hard to believe that other diseases such as HIV and AIDS also impact those in poverty. The more we study these issues related to development economics, the more I'm realising how hard it is to maintain development. The largest impact malaria seems to have on people (other than mortality rate) is school absenteeism. One study attributed 13-50% of school absenteeism to the disease, which puts a huge portion of children out of school. From our reading for Tuesday, we discussed how primary education has the highest social profitability in all world regions. However, if children, particularly school-age children, are missing school because of sickness, they may find it challenging to continue their education, leading to a continuous cycle of poverty. I found it fascinating how despite knowing all this information, we are still not spending enough on combatting malaria and keeping children in school. In fact, we are only spending around 100 million USD whereas the WHO predicts we should be spending an addition 2.5 billion USD. I understand that it is would be extremely costly to spend on vaccines and improving healthcare overall in impoverished nations, but in the case of malaria, providing basic preventions such as insect repellent and bed nets could easily decrease the risk of the disease. I also wanted to look at the impact of malaria from the point of view of tourism and possibly other forms of industry that can spur economic development. I remember in high school I was interested in going on a service learning trip to Tanzania, but my parents were against it because they were scared I would catch an illness. A number of my other friends also were not allowed to travel to various locations such as India and Thailand because of the same fear. Though the article mentions that "linkages between malaria control and tourism have not been proven rigorously", I believe that decreasing the risk of catching certain diseases can help us increase tourism in a certain region, which can further spur development.
Toggle Commented Nov 6, 2019 on 3 readings for next week at Jolly Green General
Shultz's paper relates back to what we covered the first week on the "Economic Lives of the Poor" by Banerjee and Duflo where we studied how the poor typically spend their money and time. He reiterates what we have already learned: that the poor spend a bit more than half of their income on food, and tend to have larger families. However, a few new points stuck out to me as the majority of the paper was focused on improving human capital. First, I think it's interesting how Shultz describes land as overrated. He gives several examples where those who are agriculturally dependent are poor regardless of where they live. Whether it be on the Deccan Plateau where productivity is low, or on the highly productive soils of South India, people residing there continue to be poor. While Banerjee and Duflo discussed the differences in the land-population ratio, Shultz states that there is a decline in the importance of farmland and a rise in the need for human capital. This, of course, makes sense as investments in health and education have greatly improved the quality of lives for the poor, but makes me wonder if farmland can be more productive and develop a nation. Shultz also argues for the importance of the quality of human capital. It's interesting to see how quality and quantity are substitutes, and how richer families will decrease the quantity of children they have so they can increase the quality of each one. The poor, on the other hand, continue to have multiple children and are not concerned about improving their well-being, but birth them solely so they have more labour. Decreasing quantity and increasing quality lead to healthier and better educated children, which can stimulate growth and development within a nation. I supposed the final question would be: how can we expect the poor to invest in the quality of human capital if we need a certain quantity to retain the same productivity in the short term?
Toggle Commented Oct 29, 2019 on Blog Post for Next Thursday at Jolly Green General
Duflo's paper dove deeper into what Sen covered in his book about women's empowerment and economic development. I think one of the major aspects we should focus on is ensuring women have more political power and can thus create policies for the benefit of other women. Women, when given the chance to make policy changes typically will prefer policies that better reflect their own priorities such as child healthcare and nutrition. We've learned that improving healthcare (and education) is essentially the driver for economic development. With women focusing their attention onto these issues, it just goes to show how much better off a country would be with having more women in politics. However, I did find it interesting how Duflo mentioned a study done in West Bengal where they found that a policy that invested in water and roads (two things women wanted for convivence purposes) with the trade-off being an investment in education. From an economist's point of view, an investment in education would appear much more beneficial. But, if drinking water was lagging behind, it makes sense that women in West Benegal would want an investment in water instead. I found also found gender biases to be quite interesting as this is probably the largest boundary women must overcome to empower themselves. Duflo gave numerous examples of how people believe men should be in power, and women should take on the role of a nurturing figure to children, and it reminded me of a study I learned about back in high school: When presented two people, a male leader and a female leader, with extremely similar backgrounds and jobs, people tended to favour the male leader over the female. What was funny though was that the male leader didn't exist, and the female was actually a highly regarded leader of a firm. Overcoming gender biases appears incredibly difficult as many of our beliefs seem to be deeply rooted in culture, but overcoming this is a much needed step for economic development.
My takeaway from this paper is how there is no guidebook to development. Improved healthcare and education, of course, have shown to make a huge difference, but countries cannot adopt the same policies--especially if they are too dissimilar to begin with. I think what's interesting about having no specific "guide" to development is the question of how countries are supposed to know what to do. As the author stated, "attempts to emulate successful policies elsewhere often fail," so how can countries spur development if they are unable to follow in their neighbours footsteps? Would this have to be trial and error based? It was also fascinating to me how unorthodox methods spurred China, South Korea and others into rapidly developing states. These nations did not follow the Washington Consensus, which is supposedly the desirable framework for economic growth. Latin American countries that did adopt the policies failed to develop as quickly as those in East Asia. Again, this brings up the question on what type of policy works best to develop a nation. Was the Washington Consensus considered a failure? And if it was, why? Again, it's not to say that countries must use unorthodox methods to develop. Hong Kong was an interesting case where unorthodox methods played no role--but Hong Kong also had different roots than other nations from being a part of China but also a British colony. I think in the end it's important to keep in mind the different political, cultural and social aspects of countries before attempting to spur development as there is no single framework that would work for every country.
Toggle Commented Oct 2, 2019 on Rodrik article for Thursday at Jolly Green General
As I read this article, two points stuck out to me. First was the slump of high development theory. High development theory was interesting to read because it ties directly into what we covered in class. Krugman points out that "modernisation breeds modernisation" and poor countries remain poor because they haven't found a way out of this trap yet. Governments should intervene at this point, but corruption and even improper economic advice can keep these countries stuck in the poverty trap. Additionally, most poorer nations are mainly agricultural. Without the "modern" tools to develop, how can these countries overcome the poverty trap? Additionally, Krugman heavily discusses the shortcomings of models. It's safe to say that we largely rely on models to analyse economic phenomenon, and Krugman describes a good model as one that "succeeds in explaining or rationalising some of what you see in the world in a way that you might not have expected". However, he points out that these models also rely heavily on assumptions. In class, we've discussed how the Lewis two-sector model has 4 key assumptions that we have to keep in mind, which is why it hasn't been extremely useful to describe many developing nations except for China. Other models, even physical ones like the dishpan, assume certain conditions as well. However, Krugman ends on the note that there are no alternatives to models. In fact, we all think using models and the only thing we can do is be aware that they are maps instead of reality.
Toggle Commented Sep 25, 2019 on Reading for next Thursday at Jolly Green General
This article discusses how the income disparities between fast growing economies and development laggards have widened in recent years. It is made quite clear that the fast growing economies have strong export centred development strategies whereas those stuck in the poverty trap have import substitution economic strategies. These development laggards, when they do export, typically export agricultural products or natural resources instead of industrial products. What caught my eye however was the development in China and India. Both countries were both went through incredible economic policy reforms. China underwent rural industrialisation and proposed to fight corruption--two major factors many of the development laggards have not yet achieved. India is also fascinating because the government invested in R&D and was in favour of private businesses. It is interesting to contrast this with Ghana as they also invested in R&D, but through public institutes instead. However, they were unable to make significant contributions because they lacked the "critical mass" required. Another point I found interesting and has been brought up in some of the previous blog comments is the idea of countries in poverty traps relying on agriculture exports. Are there ways we can invest in these countries to grow their industrial sector? These nations should have the resources to transition, but does the population want to? Does this tie back to our reading from last week, or from my global politics class, where we learned that people would rather live on their own land and farm instead of migrating to cities/factories and leaving their families behind? I think it is important when looking at data such as this to also take a look at cultural and historical aspects of the countries involved. Otherwise, it would be impossible for us to look for ways to improve the situation these developing countries are in.
The Economic Lives of the Poor let me analyse poverty from a different point of view that I haven't seen before. From an economic standpoint, I can't help but feel like the poor are not trying hard enough to escape poverty since there seem to be many options that people can do: especially saving money. While we talked and read about the MDG's in class, it seems interesting that eradicating extreme poverty and hunger was one of the goals since a good chuck of money the extreme poor spent was not on food, but on festivals and entertainment instead. And, as we know, spending time on entertainment is not an effective method to escape the hands of poverty. I'm curious to know what is so appealing about entertainment that people would be willing to sacrifice food for it. Another interesting point that stuck out to me was the lack of specialisation the poor have. While it makes sense that not specialising is a form of risk prevention, especially if the poor are entrepreneurs, but migration seems to be an option not sought after enough. From living in Shanghai, I've seen many Chinese from rural areas come to the city to seek job opportunities. Although it may be cultural, permanent migration for better opportunities to escape poverty appear to be a better option--though again, this addresses whether or not the poor are content with their living standards. I found it fascinating how the poor do not spend more money on food and would rather be malnourished. This is again used to prevent risk if they are ever met with disease. Overall, this article made me realise just how challenging it is to bring the poor out of poverty with all these other social and cultural factors involved.
Toggle Commented Sep 11, 2019 on Readings for next week at Jolly Green General
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Sep 9, 2019