This is Sofia G. Cuadra's Typepad Profile.
Join Typepad and start following Sofia G. Cuadra's activity
Join Now!
Already a member? Sign In
Sofia G. Cuadra
Recent Activity
This third report by the World Bank in its “Turn Down the Heat” series discussed the alarming reality of climate change and its detrimental impact on both current and future generations. Honestly, reading the report was highly depressing because it touched on numerous climate impacts that could very well occur in my own life time. The numerous negative impacts of climate change (weather extremes, rising sea levels, decreased water supplies, decreased food supplies, etc.) can all very well occur as a warming of 1.5 degrees Celsius above pre-industrial levels is already “locked-in” by 2050 — only 30 years from today! If current policies continue and we don’t tackle climate change more aggressively, there is a 40% chance that warming will exceed 4 degrees Celsius by 2100. All the hard work that the international community has done to fight extreme poverty and sustain economic development will primarily be washed down the drain. The idea of this bleak future is utterly horrid. However, at the same time as the report went in depth on specific regions, I couldn’t help but think of the difficulty in trying to convince leaders to prioritize fighting climate change. Often, many countries in these developing regions find themselves in the midst of security conflicts, whether manifested by wars or civil unrest. One could just point to Syria or Venezuela, for example. If the leadership of these countries are too focused on handling their internal conflicts, how can they tackle fighting climate change as well? I believe it is a responsibility that they honestly shouldn't have to bear, as they were not the major contributors to climate change. For this reason, much like we discussed in class on Tuesday, the responsibility to lead the fight against climate change falls extensively on developed countries with the security and means to do so. As the report mentioned, these negative impacts of climate change, in of themselves, could further exacerbate developing countries' internal conflicts by adding another source of pressure to society. People grow angry, upset, and often violent when basic needs are not met. War and civil unrest are the reality in many countries today, and if policies don't change, climate change will only exacerbate these pre-existing threats to development well into the future.
Toggle Commented Dec 4, 2019 on Last Blog Post for the Year at Jolly Green General
Parker and Vogl’s paper on conditional cash transfers, seeks to explore the long-term effects of Mexico’s Progresa program as a government strategy to alleviate current poverty and poverty in the next generation. I found the article really interesting because it allowed me to learn more about the high potential that cash transfers hold in fostering economic development. In a Latin American politics class I took last year, we learned a little bit about a similar program in Brazil called “La Bolsa Familia.” I knew the program represented a major success in reducing the level of inequality and hunger in the country, but I didn’t really understand the economics behind the conditional cash transfer model. So, this article was really helpful in clarifying the model and providing clear evidence on how conditional cash transfers can have positive, long-term effects for youth exposed to the programs early. Nonetheless, I found it particularly interesting that conditional cash transfers had significant effects on women across education, labor, earnings, and even their economic status within the household. For example, women exposed to the program at an early age increased their labor market participation by 7-11 percentage points and allowed them raise earnings by 30 to 40 US dollars per month. Since the effects were for the most part less significant for males, the results led me to believe that conditional cash transfers could represent another feasible means of empowering women, especially since women in developing countries historically have low status and participate less in the labor market than the male counterparts. As a follow up, I looked up the current status of the program in Mexico and learned that the new President AMLO planned on changing the program, including redirecting funds to other programs that offer basic education and scholarship opportunities. According to the article, AMLO's reasoning lied in the belief that the program has failed to reduce poverty as Mexico’s poverty rate still hovers around 45% without dramatically changing in the last decade. If AMLO does succeed in replacing Progresa without another substitute, then the decision would come at a dismay to the Mexican people, since the paper provides strong evidence of the program’s success.
Toggle Commented Nov 21, 2019 on Next Week at Jolly Green General
In “Interest Rates in the North and Capital Flows to the South: Is There a Missing Link?”, Eichengreen and Mody discuss the impact on U.S. interest rates on capital flows to emerging markets and the pricing of external debt. Before reading this article, I never considered the impact that U.S. interest rates at home had on investments abroad, but the further I read the article, the more the idea seemed to me as extensively reflexive of behavioral economics. The impact proved evident for Latin American fixed-rate issues as higher U.S. interest rates reduced the incentive to invest abroad and instead pushed potential investors to keep their money at home. The demand for bonds then decreased and discouraged potential borrowers from issuing further bonds. These series of events can pose a challenge for developing regions, such as Latin America, who become desperate to borrow money for debt-reducing purposes. Nonetheless, I do want to point out that U.S. interest rates may not represent the only factor impacting the flow of investments to emerging markets. I believe that the sociopolitical factors in regions where emerging markets exist play an important role in promoting or deterring investments. For example, if a country has a corrupt and unstable government set in place, I know that I would be way more hesitant to invest in that given country (as through buying bonds) because of the fear that the government may default and never pay back the bond. Consequently, there has to exist some level of a reliable financial institution capable of enforcement. If governments can offer some form of reassuring investors then maybe these emerging markets may be better capable at sustaining their development.
Toggle Commented Nov 13, 2019 on For Thursday's Discussion at Jolly Green General
Throughout “The economic and social burden of malaria,” both Sachs and Malaney make it clear that malaria negatively impacts almost every aspect of life and impedes hope for economic development in countries where the disease proves highly endemic. To me the article helped paint a more poignant picture on the importance of tackling malaria in an economic and social sense, because up to this point I didn’t really know the actual statistics behind the disease. Although many countries in temperate zones have succeeded in eradicating malaria, the disease still proliferates in tropical regions of the world to the point that there still exists between 300 and 500 million cases a year, where a child dies every 40 seconds to the disease. The high probability that the number of these cases will double in the next 20 years is highly alarming as an increase would further exacerbate the economic and social costs of the disease experienced by the world’s poor. Consequently, it proves highly appropriate that the eradication of malaria represented a major pillar in the 2015 UN Millennial Development Goals that we learned about at the beginning of this semester. On a similar point, as Sachs and Malaney discuss in the article, the causal relationship between malaria and poverty can run in both directions. For example, poverty (as endemic in low-income countries) can promote malaria due to the costs related to treatment and prevention measures, while malaria can cause poverty by deterring education, jobs, and savings and investments. Even the outside perception and fear of malaria in a country can deter tourists from visiting and foreign businesses from investing in the country. Consequently, both these sectors in malaria-endemic countries lose potential profits that could go towards economic development. These significant impediments then push you to ask why foreign aid for anti-malaria programs have not increased. A quick google, led to me to learn that an insecticide treated bednet costs around $2.00, and as the article included, bednets can reduce child mortality by up to 60% in some countries. To me (especially from a foreign aid perspective), bednets seem like a small price to pay in exchange for saving numerous lives and seeing significant returns to investments in human and physical capital. One could then argue that these bednets represent one small factor preventing major growth from occurring in these malaria-endemic countries, an idea very much reminiscent of Kremer's O-ring theory of development. A small solution could help ease the economic and social burden created by malaria.
Toggle Commented Nov 5, 2019 on 3 readings for next week at Jolly Green General
Schultz’s “The Economics of Being Poor,” argues the importance of investing in human capital, especially in the context of building skills and knowledge. This lecture given in 1979 might as well have been given today, as the issues it discusses remain highly important and often go underrated in the public policy debate. Studies predict that by 2050, the world population will reach 9 billion people and the demand for food will be higher than ever before. This statistic does raise some alarm as it questions how low-income countries can sustain development when their own population can't even feed themselves, but however, Schultz points to a solution for this limited, finite amount of land available to grow more food. His solution helps paint a brighter, more positive picture of the future. As he quotes, “the future of mankind is open ended,” human beings currently possess the means to overcome any supposedly, foreordained limitations set out by nature. Accordingly, investments in agricultural research can produce the needed technology to increase productivity and food output. This is not just some hypothesis that has yet to be tested, but rather this is a tried and true fact as soils that were once low in quality and unproductive have been transformed into productive resources with the introduction of cropland substitutes provided by agricultural research. One can look at Finland, Japan, and even the dramatic rise in corn production as a cropland substitute for examples of the transformation and hope for the future. Consequently, with the issue of limited land as an overrated issue, the focus needs to turn back to investing in human agents through health and education. As the lecture discusses, these investments provide a direct means for poor people to improve their lot in society, where they can have a chance at living a life they value. Poor people are no less rationale than their affluent peers, and they have no less incentive to prosper in life for both their own selves and their children. If a person is healthier, he or she has more energy and time to work, consume goods, and manage their land and household effectively. Instead of feeling sick and fighting off highly debilitating diseases, productivity emerges as return to the initial investment in health and education, and thus helps manifest the importance of investing in human capital.
Toggle Commented Oct 30, 2019 on Blog Post for Next Thursday at Jolly Green General
Ester Duflow’s paper, “Women Empowerment and Economic Developments analyzes the interrelation between economic development and women’s empowerment. Throughout the entire paper, Duflow’s discussion on women’s empowerment aligns well with the Senian framework of gender equality as women’s empowerment can act both as a means and end to development. One can empower women by first reducing gender inequality and poverty for all, which results in sharp focus on establishing policy that creates economic prosperity for the general population. While, on the other hand, one can reduce gender inequality and poverty for all by first empowering women as the action results in numerous positive spillovers. Some of these positive spillovers include decreased child mortality, decreased fertility, and increased workforce productivity (to name a few). Nonetheless, one aspect that I found particularly striking while reading Duflow’s paper, was how women’s own lack of confidence represented a prominent barrier in this women’s empowerment/economic development framework. I know sometimes it may be easier to discuss gender inequality in the context of developing countries, because often one can attribute the gender inequality to cultural differences. For example, in Mumbai, a business put up a billboard promoting spending Rs 500 on a sex-selective abortion because doing so proved cheaper in the short-run than in the long-run where a family pays Rs 50,000 on a dowry for marriage. It is easy to look at this example and criticize gender inequality harshly, because such cultural attitudes against females don’t exist to this overt extent in the United States, or in other highly developed countries. However, this cultural difference does not mean that these highly developed countries lack their own forms of gender inequality that we can criticize harshly. In fact, as Duflow’s paper details, barriers to gender equality in developed countries prove more systematic with the presence of a widespread “implicit” bias among both genders and deserve just as much criticism. From a young age, many girls are told that they are not as good at math as compared to boys, and so many stop pursuing math in college once the subject increases in difficulty and requires extra perseverance. For a long time, society and even parents had lower aspirations for their daughters than sons, because they believed that women were only fit for the household and did not need access to higher education. Consequently, as children learn from their parents, many women grow up without a hope and drive to be empowered and access opportunities. With such an ingrained barrier to women empowerment prevalent in societies across the world, I believe a major requirement to addressing gender inequality lies in making women realize their own skills and potential. In order to succeed in empowering women, women need to feel like they have the chance to feel empowered in the first place. If women don’t realize the inequality, then how can positive change occur sustainably in the long-run?
I really enjoyed this paper by Dani Rodrik that discussed growth strategies in regards to not only stimulating economic growth but also on sustaining economic growth. The reason why I found this paper so interesting was the repeated idea that cookie-cutter economic policy cannot work in every developing country and produce the exact same positive results that may have occurred in another developing country or even in a fully developed country. What worked in Brazil did not work in Argentina (ex. ISI). What worked in the U.S. may not work in China, or at least the means to the ends may not be the same. More specifically, I understand the reasoning behind the Washington Consensus and the potential of high growth it could stimulate, but however, as the paper points out, it is incorrect to assume that the Washington Consensus represents a “superior” capitalistic approach that should be preferred. China represents one of best case studies where extensive economic growth, as seen through property rights and macroeconomic stability (to name a couple) occurred because the country put in place unorthodox institutions. Essentially, China experienced high growth despite following experimental economic policies that went contrary to standard protocol at the time. As other east-asian countries showed high growth despite also following non-standard policies, the development proved common and, to me, hopeful. Not all is lost for developing countries, for they can initiate and sustain economic growth without being forced to replicate Western style institutions, as in the form of the Washington Consensus. They can achieve economic growth through alternative means that perhaps may be a better fit for their specific socio-political climate. In this way, the chance for achieving economic growth can reach a larger number of countries throughout the world. However, I believe it remains important to highlight that following non-standard reforms does not exempt developing countries from dealing with some level of policy experimentation to initiate economic growth. Each developing country still has to take into account its own local knowledge to follow the most appropriate growth strategy. At the same time, these countries have to understand that success may or may not be immediate; policy failures may occur along the path to sustainable economic development.
Toggle Commented Oct 2, 2019 on Rodrik article for Thursday at Jolly Green General
In "The Fall and Rise of Development Economics," Krugman offers important insight that, to me, harkened back to our first day of class. Krugman attributes the fall and rise in the acceptance of high development theory directly to the growing use of mathematical, economic models that occurred throughout the latter half of the 20th century. Essentially, the theory disappeared from mainstream economics because the theory failed to mathematically incorporate economies of scale into a simplified model. Krugman goes on to explain the limits of modeling and how they fail to capture the entirety of reality, but regardless of this fact, economic modeling should not be dismissed as it still can provide us a roadmap of reality, a more digestible way of looking at and explaining phenomena. His advice then leads to the recommendation that economists, at the same time, should not forget the main idea of one explanation just because the idea cannot be formalized. He is not recommending that we lower the standards of what classifies as strong, economic analysis but rather to strike a balance in understanding the potential value in all ideas. To me, his recommendation liberates the approach to economics and makes it more accessible to a wide range of people, beyond experts. I believe it is important to remember that in developing countries, it is critical that the local population/experts have a chance to share their ideas of what could help growth or their opinion on a policy that implements a specific economic development theory. After all, they are the one's on the ground experiencing daily hardships. Just because their ideas cannot be formalized, does not mean their ideas lack value. Of course, models should be used whenever possible to justify economic theories of growth, but they are not the end all be all to sustainable development. Together, valuing both models and unformalized ideas can allow us to ask the right questions for effective policy, even more so than if we solely relied on economic theories that fit the mainstream.
Toggle Commented Sep 25, 2019 on Reading for next Thursday at Jolly Green General
This article seeks to find answers as to why wide income disparities have emerged across the world between fast-growing economies and development laggards, as well as the role that institutional barriers play in the emergence of such disparities. What I found most interesting was the question as to why some countries who had comparatively stronger foundations, like Argentina and Chile, ended up lagging behind in economic growth to other countries who were essentially worst off in the beginning but then experienced fast growth. Specifically for these Latin American countries, the articles blames the implementation of import-substitution industrialization (ISI) in creating barriers to the fast-growth seen in other countries. I want to focus more on this policy as it led me to question some economic developments seen in the US and in some fast-growing economies today. I previously learned in my Latin American politics class that a major reason why Latin American countries implemented ISI was to reduce a dangerous dependency of their domestic industries on the international market for manufactured goods. They believed that ISI would allow them to regain a self-sufficiency by protecting domestic sectors, raising tariffs, and limiting the number of imports. Of course, as the article discusses, ISI fell short of brining self-sufficiency by creating high inflation and overall financial instability for these once strong foundational countries. I think it is interesting how this protectionist policy of ISI proved to be a reaction to this sense of dependency on foreign markets just as much as Trump, today, has implemented protectionist policies to protect the US market from a dependency on China. For many Latin American countries, the economic reaction to dependency proved debilitating to growth. Will the same occur to the US following similar protectionist policies? China has proven extensively dependent on foreign markets and has actually reaped major economic growth by focusing on exports. So, to me, after reading the article and thinking of these policies, I was left with a final question of “Is dependency on foreign markets really a bad thing at all for economies?” I assume the answer is that it depends on the country and context.
The Economic Lives of the Poor offered numerous interesting questions and possible answers about the lives of those who live under $1 or $2 per day. One specific question that I found interesting included the question of why the poor do not spend more money on food. Among the 13 countries the article looked at, food represented only 56% to mid-70% of the budget for rural and urban poor households. When I read the statistic for the first time, I found it quite surprising, because when I think of "absolute poverty" I typically think of someone who has to spend well over the majority of their daily income on merely surviving. Survival in this sense thus means caloric survival by spending money on food. Also, I thought that poor people would be quite price conscious and spend their money on the cheapest and most nutritional food options available. However, further studies indicated that many of the extreme poor spend 50% of their food budget on the quantity of food and the other 50% on more expensive/tastier food. To illustrate, many extreme poor people are not spending their entire budget on the cheapest grain, such as rice, but instead are also mindfully spending money on getting other foods they value like sugar, despite it's lack of nutrition and possible extra cost. Additionally, many extreme poor people spend some of their money on entertainment, whether that be festivals, television, etc. To me, the trend harkens back to the importance of considering well-being in creating sustainable development, beyond simply trying to raise income. Those extreme poor people who are spending the extra money on getting the better quality grain, or the tastier ingredient, or whatever form of entertainment desired are consciously doing so because they see those goods and services as having intrinsic value. To them, they are goods and services that give them satisfaction and, in a way, are necessary for their well-being and happiness. Consequently, the idea follows with the supporting statistic that self-reported levels of unhappiness among the poor are actually not incredibly low. I know if I were in their shoes, I would most likely make the same choice of not spending my entire budget on food and instead save some to spend on other valuable means, because it would improve my sense of well-being and happiness within my reach. After all, I believe those are important qualities to living a good-life.
Toggle Commented Sep 11, 2019 on Readings for next week at Jolly Green General
Sofia G. Cuadra is now following The Typepad Team
Sep 11, 2019