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Maisie Strawn
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Time and again we referenced Garrett Hardin’s phrase “mutual coercion mutually agreed upon” to address the issues we discussed in this class. That phrase, in and of itself, is one of my key takeaways from this semester. However, the most important thing I have learned from this class is that environmental economics (done well and when informed by concerns for justice and equity) could actually eliminate the need for the “mutual coercion” aspect of that argument. Environmental economics shows us that the way we are doing many things now is inefficient and inequitable. We should be able to mutually agree to address those problems without the force or threats of coercion. We have learned about how economists, scientists, and entrepreneurs are already showing us that good environmental policy and choices can actually “expand the pie,” growing economic opportunities for everyone while protecting our health, air, and water. To me, that does not seem like something we need to be coerced into. Unfortunately, as we’ve learned, interests, ideology, and ignorance have kept us and continue to keep us from making these more efficient, equitable, and healthy decisions. That’s where I think this class will make me a better citizen; it has given me tools, sound economic arguments, evidence, and even a little neuroscience, to fight the three I’s. I was really struck by the articles and discussions we had towards the end of the semester about the ties between environmental degradation, health, and inequity. In these times, I think that it is a really powerful place to start in addressing selfish interests and ignorance.
Toggle Commented Apr 22, 2020 on ECON 255 Final Exam at Jolly Green General
Neuro-conservation is a really interesting subject. I have read several articles about the mental and emotional benefits of being outside in nature and the importance of green space.(I really like this one from the Greater Good Science Center at UC Berkeley https://greatergood.berkeley.edu/article/item/how_nature_makes_you_kinder_happier_more_creative). There is certainly room for a neuro-conservation argument within the broader framework of environmental activism. It can be an important tool for effectively communicating environmental issues to a broader public; messaging certainly should not be negative all the time. Your audience will become burnt-out with negativity. However, I think in some places it has to be just one aspect of a multi-part strategy. For example, you might explain some environmental problem with the frightening statistics and facts, but then give your audience actionable steps to take, so they feel empowered not helpless. I think most would agree that it was negative imagery, like the burning Cuyahoga river or Rachel Carson’s “Silent Spring,” that spurred the environmental movement of the early 1970s, which resulted in the creation of some of our most important environmental protection laws. In my own life and community, I have not seen that people having connections and positive feelings towards nature necessarily means they are going to want to conserve it. My county is surrounded by water on three sides and spending time outside and on the rivers is a huge part of life here, but that doesn’t seem to translate to wanting to take action on or even believe in environmental issues like climate change, despite the fact that, in my experience, lots of people here do have a “sense of awe, respect, and peace” towards their surrounding environment. I think there’s a lot of the work of the three I’s that must be overcome to successfully communicate environmental issues in communities like mine. Although messaging like what Nichols calls for can be an important part of that, I don’t think it’s up to the task alone.
I was impressed by the Solutions Project website and their mission. Science communication, in many ways, is actually as important as the science itself, and the Solutions Project does it really well. The map of the 100% Clean Energy Vision was clear and easy to use, and the automatically generated graphics at the country, state, and city were excellently done: simple, clear, and concise. They seem to understand that most people have no interest in reading a long article, and often spend only seconds viewing something. They’ve figured out how to convey their message in only a couple of scrolls, which I think is really powerful. From the American Prospect website, I read the article entitled, “The Green New Deal as Economic Development.” This article focused on three key areas: job creation, job loss and just transitions, and fixing communities. Overall, I thought the article was important because something like the Green New Deal will likely never be politically feasible unless it's sold as economic development, job creation, and infrastructure improvement. The job creation section of the article really focused on construction and construction workers, which was interesting to me as my dad has worked in the construction industry almost his entire career. The author talked about the role unions could play in the Green New Deal, but didn’t really address in any depth the fact many states especially in the South are “right-to-work” states where unions don’t really hold much power. I guess the implication is that the GND would solve this problem. The article also talked about having a “Superfund for workers” who lose their jobs during the transition to clean energy, which I thought was interesting and really important. I think that the “Superfund” could also look like free job training and not just wages and benefits until they find comparable work.
1) I really appreciated the Stanford article when Rob Jackson answered the question about the most important reason for the GND with, “Is saving the planet reason enough? I hope so. If not, how about the tens of thousands of Americans who die unnecessarily each year from coal-fired power plants and our vehicles, the two deadliest sources of air pollution in the country?” --- I think this gets to the point I was trying to make in a previous blog entry about how we have an obligation to produce energy and products in a way that doesn’t lead to the premature death of thousands each year. 2) I found the focus on worker’s rights and protections in the language of the GND to be particularly pertinent in light of the coronavirus. Across the political spectrum of my facebook feed I have seen a lot of people sharing articles and expressing concern about how “essential” workers are being treated. I’d like to hope that after this is under control there will be real bipartisan, grassroots energy to protect and empower the American worker. 3) One of the most salient points of the Stanford piece was the assertion that a GND would actually reduce costs substantially. As we have talked about all year, just because fossil fuels are low-priced does not mean they are low-cost: “U.S. consumers will pay only $1 trillion per year in energy costs with the GND, whereas under a fossil fuel system, they will pay $2 trillion per year in energy costs and $600 billion per year in air pollution health costs, and will incur $3.3 trillion per year in global climate costs due to U.S. emissions, for a total economic cost of $5.9 trillion per year” 4) It was really cool that they specifically mentioned support of sustainable, family farming and soil health in the GND. I think that the plight of the American farmer and the fragility and even inefficiency of our food distribution network is also something that the coronavirus situation has brought attention to. I hope that it continues to be focused on in the aftermath. One thing I have been disturbed by is the treatment of our farmworkers during all of this; Trump has suggested cutting the wages of farmworkers (https://thehill.com/policy/healthcare/492320-trump-admin-looks-to-cut-farmworker-pay-to-help-industry-during-pandemic), and many migrant farmworkers lack any protections of their wages or health https://www.nationalgeographic.com/science/2020/04/farmworkers-risk-coronavirus-infection-keep-us-fed/). If our farmworkers start getting sick it will have major consequences on the availability of fresh produce across the country.
Toggle Commented Apr 15, 2020 on ECON 255: The Green New Deal at Jolly Green General
This article gave specific examples from south Texas counties, but it could have been written about my own community, Gloucester, Va. We currently have a D- on the Unacast Covid-19 Social Distancing Scoreboard (https://www.unacast.com/covid19/social-distancing-scoreboard). To be fair, many people in my county are employed in industries that are deemed "essential," and I'm not sure how that plays into Unacast's ranking. But, many who could isolate and socially distance are not. I can definitely see the factors this article mentions, education, political identity, social capital, playing into that. As a matter of curiosity, I pulled up Yale's Climate Opinion Map to compare to the Unacast scoreboard map. Unsurprisingly, the estimated percentage of adults who believe climate change is happening in my county is 8% less than the national average. (https://climatecommunication.yale.edu/visualizations-data/ycom-us/)
First, I wonder about how the authors of these two pieces reached their remarkably divergent conclusions for what the beginning price of the carbon tax should be. Besides differences in language and framing, this seemed to be the only major dissimilarity in the conclusions of the two papers. I would like to discuss the environmental and economic impact of choosing a $40/ton tax versus a $230/ton tax. How could the authors reach such different conclusions? Can they be reconciled? It is promising that at least the two groups agree that there should be a tax, but why does this seem to be so politically unfeasible? I found this article from the Urban Institute & the Brookings Institution, which touched on the unpopularity of carbon taxes with voters globally: https://www.taxpolicycenter.org/taxvox/economists-love-carbon-taxes-voters-dont. I think that the carbon dividend aspect should be really helpful in passing a carbon tax, but it seems that achieving any carbon tax will require successful communication to voters and politicians. Second, I really appreciated that the conservative argument for a carbon tax piece touched on the role a carbon tax could play in stimulating investment in infrastructure. We have such an opportunity right now to invest in America’s infrastructure (https://www.brookings.edu/blog/the-avenue/2020/04/07/covid-19-is-a-chance-to-invest-in-our-essential-infrastructure-workforce/). It’s interesting to think about how a carbon tax could be a part of that.
Toggle Commented Apr 13, 2020 on The Case(es) for a Carbon Tax at Jolly Green General
We know that there are economic models that illustrate the economic inefficiency of letting petrochemical firms push the negative costs of their pollution onto the public. Of course, economic efficiency is not what we should be concerned about here. It is truly shameful and repugnant that there is an area of this country referred to as “Cancer Alley” where it is widely known that the emissions of petrochemical plants are literally killing the residents of the communities in which they are located. How is it that we know this and it continues to exist? Why do we seem to be (as a country) okay with “Cancer Alley”? At one point, the projected deaths in the U.S. from COVID-19 was between 100,000 and 200,000. We have seen (for the most part) the country come together to fight this virus, and it seems to be working. Estimates of the death toll keep getting adjusted downward. I in no way mean to belittle the impact and threat of coronavirus. But, I want to draw attention to the fact that, according to a study from the American Medical Association, air pollution leads to the death of 200,000 Americans EVERY YEAR. This burden of death is disproportionately borne by individuals of color and those of lower socioeconomic status. What if we motivated the same response to this threat as we have to coronavirus? It seems to me that if we had tributes to individuals killed by pollution in places like “Cancer Alley” and Appalachia running on major news outlets every night, like we’ve had for those lost to coronavirus, there might not be so many lives lost each year. These people’s lives matter--I don't care about the economics. Although, I feel certain, as we’ve learned in this class, the way things are operating now is NOT efficient. We don’t have to produce energy or plastics in ways that kill people in our country and around the globe. We can do things in a better way, and we have a moral duty to do so. We don’t have to let climate change destroy lives in our country or around the world either. We can do things in a better way. AMA article: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2755672?utm_source=For_The_Media&utm_medium=referral&utm_campaign=ftm_links&utm_term=112019
I found the map in the “Ten Facts about the Economics of Climate Change and Policy” illustrating the effect of climate change on per capita GDP in 2100 by Country to be particularly striking and concerning. The economic impact of climate change on the global economy is potentially devastating--if we take no action. However, there is reason for hope if we follow the powerful economic argument to take action now, particularly by putting a price on carbon. The authors illustrate how the price of renewable energy is already falling despite most GHG emissions still not being covered by a carbon pricing initiative.If the U.S. did institute a price on carbon price starting at $50 per ton we could reduce our carbon emissions by up to 30%!, “yielding climate-related benefits that exceed the economic costs by about 70 percent”. These benefits can already be seen in the U.S. in states that are participating in the RGGI. A report from the Analysis Group (2018) (https://www.analysisgroup.com/globalassets/uploadedfiles/content/insights/publishing/analysis_group_rggi_report_april_2018.pdf) found that, as a result of their participation, RGGI states have generated approximately $4 billion in net positive economic value for their economies. Another study from the Acadia Center (2016)(https://acadiacenter.org/wp-content/uploads/2016/07/Acadia_Center_2016_RGGI_Report-Measuring_Success_FINAL_08092016.pdf) finds that initiative has added tens of thousands of job years in participating states. While enjoying these economic gains, RGGI states have also substantially decreased their green-house gas emissions, which obviously has its own benefits. We have the opportunity to actually increase economic prosperity for all while addressing climate change.
A marginal social benefit/marginal social cost model seems like a reasonable way to understand this issue. I feel certain that if we had enough information to accurately model the marginal social cost associated with the rollbacks in air pollution standards they would far outweigh the small benefit in cost savings by these companies. Trump and his administration’s justification for the rollbacks (that social distancing will make compliance more difficult for companies) seems unlikely. It seems far more likely that Trump is just pushing through his most egregious environmental protection deregulation while the public is distracted by the pandemic. This article (https://www.nytimes.com/2020/03/25/climate/coronavirus-environmental-regulations-trump.html) from the New York Times confirmed my fears. Trump is also pushing for loosening of controls concerning mercury emissions and toxic ash associated with coal plants. Both of these pollutants pose significant public health risks to Americans---aren’t we in enough of a health crisis already?? All of these sorts of potential regulatory changes are supposed to have a period where the public can comment on them. In light of the pandemic and the significant disruptions to many American’s lives, requests have reasonably been made to extend those public-comment periods. Trump’s administration has denied those requests. Requests to hold virtual public meetings regarding certain rule changes have also been denied. A spokesperson for Trump said that “We understand that Covid-19 has caused disruption in the lives of many Americans, but it is our duty to the American people to ensure we are continuing our work toward protecting human health and the environment,” in regards to the denial of requests for extended or virtual public-comment period. This rings incredibly false when these proposed rule changes will directly negatively affect the health of Americans.
I found all three of these articles to be really interesting, especially the article on air pollution and cognition. These articles are especially important given various researchers’ findings that appealing to health issues is the best way to motivate leaders to take action on environmental issues. Dr Maria Neira, director of Public Health and Environment at the World Health Organization, put it well saying, “..threats to health — a matter of deep personal concern to everyone — have the power to galvanize in pursuit of environmental recovery.” (https://www.who.int/quantifying_ehimpacts/publications/previdsvideo/en/). Articles like these three help the public and lawmakers understand exactly how environmental degradation affects their everyday life. I think the threats of environmental degradation can sometimes feel vague or distant, but these papers do an excellent job of demonstrating their negative impact. I doubt most people have any idea that ambient air pollution could be affecting their cognitive abilities; I had never heard of such research before. It’s also important to consider that, like with many environmental issues, it is often the most vulnerable who are the most adversely affected. This was especially evident in the article on ozone in Australia and in the article on the effects of particles on human health. Both articles discuss how people with pre-existing respiratory conditions are the most susceptible to negative health effects from poor air quality. I think this ties into what we read about the damage air pollution can do to infants, even in utero. You cannot really protect yourself from the air you breathe, especially when you’re not even born yet, so it only seems reasonable to me that we seek to achieve air quality that protects the most vulnerable or helpless among us.
Toggle Commented Mar 11, 2020 on 3 short papers for Friday at Jolly Green General
I found this paper really interesting. I think it is quite powerful to be able to actually point to the monetary costs of coal mining, transport, combustion, and waste disposal especially when arguing for the need to move towards renewable energy sources. Many of the statistics and facts in the paper were alarming, and I have always considered coal to be “bad,” I just did not realize how costly it is. On a hopeful note, however, this paper is almost ten years old now, and it seems that they overestimated how much coal we would be using today and in the future. They predict, in this 2011 paper, that by 2030 coal will account for 53% of U.S. power, a general upward trend from the 50% of U.S. energy coal produced in 2005. Surprisingly and hopefully, we have actually seen a fairly steep decline in the share of U.S. electricity coming from coal. According to the U.S. Energy Information Administration, coal only accounted for 23.5% of U.S. energy production (https://www.eia.gov/tools/faqs/faq.php?id=427&t=3). I have some guesses about why we saw this trend (natural gas), but I would love to discuss in class why it was so dramatically opposite what this paper anticipated. This downward trend in coal use ( even without policy forcing the internalization of any of the costs listed in this paper) makes me think about all that could be accomplished in the sustainable energy field, if we DO begin to craft policies to internalize these costs. Surely, coal production would cease in Kentucky, for example, where this study finds coal results in a loss of $115 million dollars to the state even without factoring in costs of “healthcare, lost productivity, water treatment for siltation and water infrastructure, limited development potential due to poor air quality, and social expenditures associated with declines in employment and related economic hardships of coal-field communities.” The cost of limited development potential is especially poignant as I believe that members of coal-mining communities are often manipulated and falsely led to believe that coal is their only opportunity for employment. In fact, this study finds that increased levels of mining are correlated with higher poverty and unemployment rates and lower levels of educational attainment and household income.
Toggle Commented Mar 4, 2020 on Discussion Paper for Friday at Jolly Green General
Janet Currie’s “Pollution and Infant Health,” was fascinating and disturbing. I had several takeaways. First, the way they are able to use natural experiments to establish causality is remarkable. We discussed the EZ-Pass experiment in my Econometrics class as an example of one of the notable ways economists/scientists are able to exploit exogenous changes in order to design a study that is as if there was random assignment. This made me think about the Yale360 article on Michael Hendryx’s research on MTR coal mining. I wonder if there are any natural experiment situations Hendryx could use to begin to establish the causal link that the industry claims must be present to prove that spikes in illness are actually caused by pollution from MTR. Second, some of the statistics from this paper are just so striking: moving from an area of higher CO levels to an area of lower levels had a more significant effect on infant health than convincing a mother who smoked ten cigarettes a day to stop! I found this one particularly disturbing, as most of the time I don’t think people really know the amount of pollution to which they are being exposed. A pregnant woman could be taking every precaution for the health of her unborn child but not know that the air she is breathing could cause it more harm than if she chose to smoke every day. To that point, this article also reminded me of my Environmental Policy and Law class and particularly the regulation of air and water pollutants. I believe there is an assumption among most Americans that our government and regulators are effectively keeping us safe from dangerous pollutants; unfortunately this is just not really the case. As Currie mentions in her article, the Clean Air Act only really monitors six key pollutants, particulate matter, CO, ozone, lead, sulfur dioxide, and nitrous oxides, but industry pumps out far more chemicals than that each day and develops thousands more new chemicals each year. Regulators cannot possibly test and monitor all these possible pollutants under the current system, so there is a lot we don’t know about how different chemicals in our air and water are affecting us. Furthermore, and as Currie addresses in her article, minorities and low-income individuals are disproportionately affected by these pollutants. These inequities must be kept in mind as we (hopefully) begin to better regulate pollutants; economic efficiency cannot be the only consideration, but rather a starting point. Perhaps the best place we could start in addressing pollution is just making the general public aware of the magnitude of chemicals entering our air and water.
I had a couple of questions as I read through the paper: Do the tourists typically know before going to Belize that they will be required to pay the conservation fee when they depart the country? What would happen if they refused to pay it? I am imagining a scenario where a tourist’s stated maximum WTP was at the mean WTP, $31.08, but Belize had upped the fee to $40 dollars; is the idea that tourist wouldn’t come to Belize at all? Or that when asked to pay they would just refuse? Both seem somehow unlikely to me. Similarly, what happens to the 62% (if I interpreted the chart correctly) of tourists who claim their WTP is beneath $20 dollars when the fee gets raised to that? Again, will they not come to the country at all? It seems unlikely to me that well-off tourists would be deterred from visiting the country just because the departure fee is $10 higher than what they claim they would be willing to pay. On the flip-side, is there a way Belize could capture some of the people’s willingness to pay that is higher than whatever the fee amounts ends up being? Could they explain what the fee was going towards and then ask if the tourist wanted to donate additional money to the cause? I feel like this could possibly play into some of the cognitive effects we talked about in class, in that the tourists would just have had a positive experience in the natural environment, so maybe they would be more willing to pay a little extra. I wonder if there is any precedent for trying something like that.
It is interesting to read Krutilla’s essay in the context of the recent rollbacks of environmental regulations by President Trump (https://www.nytimes.com/interactive/2019/climate/trump-environment-rollbacks.html for some sense of just how much degregulation has occured). The rationale behind Trump’s crusade to deregulate environmental degradation seems to be to allow for less hindrances to development and industry, but this may not be the kind of development we should be focusing on at all. All of this deregulation will and does lead to the conversion of natural environments that Krutilla writes about. I believe Krutilla would be horrified by the rollbacks on environmental protection, instead arguing that we need to slow the destruction of land and other natural resources (especially by aging, unsustainable industries) and instead invest in new technology that will allow us to actually improve quality of life while preserving nature for future uses. I think humans, in general, are fairly short-sighted, so it’s not that surprising that we seem to have a hard time grasping the idea of refraining to use something now (like natural resources) because it might be more useful to us later. Unfortunately, it seems that this phenomenon is often compounded by our political and economic systems which are dominated by short-term decisions (2, 4, or 6 year-terms for politics and quarterly earnings for our financial system). We need to find some way to build long-term thinking into our institutions to better pursue what Krutilla lays out so plainly in “Conservation Reconsidered.”
I would love to discuss in class the implications of Coase’s theory on environmental justice issues. As far as I could tell, Coase does not consider issues of equity or justice at all in the paper except to set “questions of equity apart” (pg.19). I would imagine that these sorts of issues may not have been as large a part of the conversation in 1960 as they are in the present. But to me, knowing what we know now, it seems irresponsible to set “questions of equity apart.” The examples Coase gave in the paper were all very simple, which helped me in understanding the basic tenets of his argument but left me a little confused in how it would work in application. It seems to me that under Coase’s theory poor people who live next to some giant polluting industry and are getting sick from it, and cannot afford to pay the industry whatever amount would make them stop polluting, should just be expected to move somewhere else. This feels intuitively wrong in both an ethical and efficiency sense. Or, like in the case of greenhouse gas emissions, what if the person who is going to be harmed by some pollutant does not exist yet to bargain with some firm? It does not seem that Coase’s ideas allow for any sort of intertemporal negotiation, which is hugely important in terms of environmental issues. Greenhouse gases emitted today will affect generations of people, and so many other pollutants can persist in the environment for decades if not centuries to cause harm to future people. My final thought, and this is a little bit more out there, is that there are entities (plants or animals) but maybe some people too, who cannot negotiate in monetary terms but are still affected by pollution and might like to negotiate if they could. In a similar vein, it seems that the negotiation process leaves a lot of room for people to be taken advantage of us and requires really good information for both parties, which often times is not available.
Focusing on any one effect of climate change can be overwhelming. Take for instance the World Bank’s assertion in this report that, “projections of coral bleaching indicate that preserving more than 10 percent of these unique ecosystems calls for limiting global warming to 1.5°C.” From my understanding, limiting warming to 1.5 degrees Celsius is practically impossible at this point, and it is difficult to even begin to understand how significant it is to lose over 90% of our coral reefs. The effects of that loss alone are likely to be felt globally and could be catastrophic for island nations particularly. Of course, loss of coral reefs is just one symptom among many related to climate change. There is also unprecedented heat, drought, extreme weather events, sea-level rise, and changing precipitation trends among others with which to contend. As was made clear in this report, these climate change effects have large implications for development and poverty reduction. This connection is not surprising given the number of issues that we discussed in this class that were brought up in this report: agricultural systems and crop yield, human health, labor productivity, global trade, and infrastructure. Climate change seems to affect every single one of the aspects of economic development that we have touched on in this class. I found some of the data on crop yields to be particularly alarming. In this report the World Bank estimates that at 1.5-2 degrees Celsius, crop yields in Jordan, Egypt, and Libya may decrease by up to 30 percent, 50 percent in Macedonia for maize, wheat, vegetables and grapes, 30-70 percent in Brazil for soybean. From what we have discussed in class, the implications of these yield declines could be potentially devastating. So many developing economies are reliant on agriculture. Agricultural goods are often their primary exports and the largest sector of the economy. When agriculture is disrupted and there are times of hardship, we have learned that it is women who will suffer disproportionately. Scarcity can lead to unrest and even violence. There are similar implications for nearly every effect of climate change from sea-level rise to extreme weather. Thus, the World Bank’s assertion that “action is urgently needed on climate change” could probably be phrased even more strongly. I think that it will be particularly important to examine our institutions in light of climate change and explore how policy may be developed to combat the unequal distribution of the effects of climate change and to protect and empower the most marginalized. Otherwise, it seems, climate change will further exacerbate global inequality, which also has implications for development. Frustratingly, the countries who likely will be most affected by climate change are probably some of the smallest contributors to it, and they lack the power to force action from larger contributors like the U.S.
Toggle Commented Dec 3, 2019 on Last Blog Post for the Year at Jolly Green General
I found Susan Parker and Tom Vogel’s “Do Conditional Cash Transfers Improve Economic Outcomes in the Next Generation? Evidence from Mexico” to be an incredibly fascinating and impact paper. Of course, the most important finding of the paper is that the answer to the question they pose in the title is, yes. The conditional cash transfers studied in this paper improve educational attainment, geographic mobility, and household economic impacts. The benefits were especially powerful for women, for whom early exposure to the Progres program increased labor market participation 7-11 percentage points. It is not necessarily surprising that giving cash to families contingent on children’s attendance and completion of school might affect educational attainment, but the significance of the effect of the Progresa program on completed years of schooling is impressive. The impact of these additional years of completed schooling on monthly labor market earnings for women particularly are truly impressive. It is interesting to me to connect these findings back to our discussions on investment in human capital and public returns to education. This study focuses on the individual impacts of the Progresa program on economic outcomes; it would be fascinating to study the community-wide effects of the program. How do the increased educational attainment, labor market participation, and increases in wages associated with the Progresa program impact the entire community? The impact of these conditional cash transfers made me think about the program that my mom runs through the Virginia Community College System called Great Expectations. The goal of the program is to help young adults who have experienced foster care to graduate or earn a credential from community college. The program mostly operates through a coaching program, but also offers financial aid to cover the cost of attending classes. The program has been reasonable successful, but reading the Parker and Vogel paper made me think about how helpful conditional cash transfers might be in a program like this. Similarly to the situation in Mexico, these young adults face a significant opportunity cost to attend classes when they could be putting in more time at mostly hourly jobs. Conditional cash transfers could lower this opportunity cost, and I have a feeling that such a program would have many of the same effects of the Progresa program. The increased educational attainment in the Great Expectations program has already been linked to lower unemployment, lower levels of homelessness, and lower rates of crime for youth experiencing foster care in Virginia. It seems likely that using something like a CCT to further increase that educational attainment would improve those effects even further.
Toggle Commented Nov 19, 2019 on Next Week at Jolly Green General
To be honest, I found some parts of this paper to be quite technical and confusing. I’m not sure I fully understand the concepts of launch and market spreads or the equation they used in the New Evidence section and it is totally possible that I misinterpreted parts of the paper because of this lack of understanding. However, the main takeaway of this paper seemed pretty clear: like most things we have discussed this year, the relationship between interest rates in industrialized countries in the global North and developing countries in the global South is more nuanced and complicated than at first it was understood. Although, interest rates in the global North are an important determinant in cash flows to the global South they are not the only factor and without understanding these other factors the relationship can become murky. It also reveals something we have discussed all semester, which is that developing countries (or people in developing countries) are not just patients, but rather actors in their own development. People in developing countries can see when U.S. interest rates are higher and chose not to issue bonds, which has been especially true of more stable East Asian countries. The differences between Latin American and East Asian countries was interesting, and I think pointed to the role of the economic conditions of the borrowing country in pulling cash from more developed countries. The differences between East Asian and Latin America countries pointed to another theme of this class, which is that institutions and historical context matter. Nothing happens in a vacuum. In trying to better understand this paper, I attempted to do some outside research on U.S. interest rates and capital flows to developing countries. Although I did find some interesting articles, they were all pretty dated--mostly from the same time frame as this article about 20 years ago. I wonder how these issues have changed with both increasing globalization and the more recent trend of rising nationalism, especially in more developed countries. How/are foreign investment decisions affected by these political trends? Why was this such a popular issue in the late 1990s? I think historical context for this issue would be really interesting. I also have a few lingering comments related to our discussion Tuesday. First, just as an interesting comparison to the extremely low default rates of microcredit, it is expected that 40% of American borrowers will default on their student loans by 2023 (https://www.cnbc.com/2018/08/13/twenty-two-percent-of-student-loan-borrowers-fall-into-default.html). It is interesting to think about all that underlies this comparison. Second, in my class period we talked a little about how microcredit is often used by people in developing countries to smooth consumption and how this phenomenon can be seen in the U.S. too (e.g. when people use credit cards to buy groceries). I found this to be a very stirring discussion because those Americans using credit cards to buy groceries were my own family during the recession. My dad works in construction, so the recession put a significant financial strain on my family. My mom routinely had to use credit cards to purchase groceries for our family. This finding then-that microcredit is useful to the poor in developing countries to smooth consumption shocks-was not surprising to me, but rather in-line with my own experiences. I find this to be another example of something we have talked about all year: that poor people in developing countries are just like everyone else and are making economic decisions and have motivations very similar to those of people in developed countries.
Toggle Commented Nov 13, 2019 on For Thursday's Discussion at Jolly Green General
I found these articles to be perhaps the most fascinating we have read so far this semester. I found their ability to isolate the effects of one just one factors (malaria or access to ART) to be incredibly powerful, especially when you consider how consequential those effects are. At first, such an analysis can be overwhelming. Not only does malaria kill a child every 40 seconds, but there’s powerful evidence that it has effects on overall economic growth rate of a country, schooling, saving, trade, tourism, and foreign direct investment and overall investment in human capital. Malaria and poverty seem to interact in horrible negative cycle. In Malawi, one million people are living with HIV/AIDS, which has significant impacts on savings and investment in education among other factors. These negative impacts could lead to a feeling of despair. But the findings of these studies actually give reason for hope. There is no panacea for economic development, but there is so much that can be achieved if malaria is eliminated and access to ART is increased. Huge strides have already been made towards these goals even with extremely inadequate finding (especially in consideration of the huge social benefits of eliminating these diseases). I believe these two studies provide compelling evidence for the impacts of investing in health and general and the eradication of these two diseases specifically. I was particularly struck by the study on the impacts of ART facilities in Malawi and how something as simple as transportation can hinder people’s ability to access this life-saving drug. I won’t say that this is an easy problem to fix, but it IS solvable. To me, that gives so much reason for hope. Of course, it is also incredibly frustrating when you consider how relatively little funding has been devoted to these issues when their elimination would have such incredible impacts on entire countries. These diseases are so tied to so many other factors; their elimination would have broad positive effects on the entire economy: Sachs and Malaney write that, “in low-income settings [reducing malaria transmission] may well prove to be among the most effective available spur to overall economic development.” The underlying role of psychology on savings rate, especially in the Baranov and Kohler article, was also fascinating. Just the mere perception of increased life expectancy is enough to affect savings rate. The availability of ART clinics increased savings rate for both individuals with and without HIV/AIDS. The availability/proximity of an ART clinic had significant effects on human capital investment in the form of expenditures on education for children. The researchers also found impacts on mental health, which makes sense, but is incredibly interesting. They hypothesized that these improvements in mental health could also affect productivity. Economics is truly interdisciplinary.
Toggle Commented Nov 5, 2019 on 3 readings for next week at Jolly Green General
I thought Schultz’s lecture tied together a number of things we have been discussing all semester, which I suppose makes perfect sense--it would be hard to talk about development economics without talking about human capital or population quality as Schultz puts it. I appreciated Schultz’s focus on agriculture at the beginning of the lecture, and his point that “discrimination against agriculture is rationalized on the grounds that agriculture is inherently backward and that its economic contribution is of little importance” leads me to the conclusion that I have been thinking about through a number of our discussions and in my Food in the Holocene class with Professor Fisher, which is that we really need to rethink and revalue agriculture globally. There is perhaps no more important industry than agriculture globally, and yet it seems that livelihoods for farmers the world over are less than adequate. Schultz first attributes this to failures by governments to let farmers be entrepreneurs and modernize agriculture themselves. I was a little confused by this statement and I would love to discuss it more in class if time permits. However, his second point about inevitability of disequilibria and that “interventions by governments are currently the major cause of the lack of optimum economic incentives” rang true for me, at least in the U.S.. Various government subsidies for agricultural products, particularly corn, have led to a whole host of problems for both American farmers and farmers in other countries. However, it seems that there may be some government policies like crop insurance that could actually help farmers participate in the entrepreneurial activity that Schultz talks about. The importance of investments in health and education are clearly incredibly powerful for development both in the agricultural sector (which still holds most of the population in developing countries), but also for non-agricultural workers. It is very interesting to me to think about investments in health and education in the U.S. for agricultural-based communities. In my own experience, public schools in rural areas are typically far inferior to those in metropolitan areas. It is harder to get good teachers, there are less programs, and overall less funding. Healthcare is also a huge concern for rural areas in the United States. Accessing high quality healthcare is somewhat of an issue in my own community, but in the Western United States hospitals can be hundreds of miles apart and incredibly poorly staffed. I wonder what the implications of failing to invest in the most basic population quality factors (health and education) in rural areas will mean for the future development of the United States as a whole. It is not just investments in health and education where we are failing either. As we discussed in relation to land-grant universities, despite the huge benefits of agricultural research, research institutions are systematically underfunded. We will certainly fall behind developing countries like India and China that are investing heavily in such research activities.
Toggle Commented Oct 30, 2019 on Blog Post for Next Thursday at Jolly Green General
I went to an all-girls high school (the dynamics of which could probably warrant a research paper the length of Duflo’s), and needless to say, we thought about girls, feminism, and equality a lot. I remember sitting in my sophomore English class and looking up that this poster that said, “feminism is the radical idea that women are people too.” At the time, this seemed a very strange phrase to me: of course, women are people! But, the sentiment of the quote (I cannot remember who it was attributed to) actually fits incredibly well with the concluding argument of Esther Duflo’s article. Women’s empowerment and development are inextricably linked: development can precipitate some empowerment of women and empowerment of women can impact development. However, women’s empowerment need not directly lead to further development to be worthwhile. Women are people too; their rights matter whether they lead directly to economic development or not. Of course there will be trade-offs in the pursuit of greater gender equality, women may choose improvement of water quality and roads over education when given the opportunity to participate in the allocation of funds. The fact that there may be trade-offs does not justify not pursuing gender equality, and just because every decision that improves the status of women may not have overarching positive implications for everyone else (like female literacy) does not mean that its pursuit is not worthwhile. Almost as a bonus, but unsurprisingly, empowering women is (overall) a positive force for economic development while also being an intrinsically worthwhile end. On a separate note, I think the discussion and research on distribution and equity within households to be fascinating. It is one factor of women’s empowerment that can be explored across nations and levels of development. It can reveal so much surrounding attitudes about women and gives a really interesting insight into how women are treated and valued. Duflo writes about how at all levels of income and across nations women are expected to do the majority of the housework, and consequently have less time to spend doing market work. Interestingly, it does not seem that the percentage of housework and child rearing women are expected to do decreases proportionally with their increasing contributions to family income. I have seen this in my own family. My mom is actually the higher-earner between my two parents, but my mom does the vast majority of the housework and child-related tasks. Don’t get me wrong, I love my dad, but the distribution of housework is objectively uneven. Why is this the case? Even among my own relatively progressive parents? How can we move past this double burden that so many women experience across the globe?
I cannot imagine a more satisfying way to conclude our discussion of the history of growth and development theories than reading Dani Rodrik’s “Growth Strategies,” which mentioned so many of the different theories we discussed, and ultimately concluded that none of them are universally prescriptive. This seems almost intuitive--of course there is no “one-size-fits-all” solution to starting and sustaining economic growth. However, in the context of our historical study of the development of these theories, it is a pretty bold claim that none of them are really right. Rather, Rodrik claims each country’s strategy must be unique and locally-tailored. Although there are some universal guiding principles to growth strategy (property rights, incentives, rule of law, sound money, fiscal sustainability, prudential regulation, targeting, and incentive compatibility), there is no one set of institutional arrangements or policies that must be used to achieve those principles. He provides a wealth of information to prove this is the case. The rapid development of several East Asian countries provide the most powerful examples that a country does not have to follow the Washington Consensus to experience rapid growth. The second main claim of Rodrik’s paper is that kick starting growth and sustaining growth are somewhat separate objectives. Sustaining growth involves the development of high quality institutions appropriate to the country and the values of its citizens. Each country’s institutions will be different as the social preferences of its citizens are different. The ability to sustain growth is where already developed countries have a real advantage, as they have had time to experiment with and change their institutions to be most productive. This was a very interesting concept to me. It makes me wonder if, as American growth is slowing, perhaps we need to re-examine our institutions and begin a process of trial and error in order to be able to continue sustaining growth. Further, we may need to focus in on our “democratic institutions and civil liberties” in order to ensure we are supporting sound economic institutions to sustain growth. Rodrik’s claim for the need for policy experimentation or “search and discovery” was also very interesting to me. The idea makes sense: If there is no one universally applicable set of policies to set in motion and sustain growth then, of course, countries must experiment with different policies to see what works best for them. The idea of experimenting with national policy is a little frightening to me, however. Rodrik claims this is where economists can be most helpful as they can “identify the sources of inefficiency, describe the relevant trade offs, figure out general-equilibrium implications, predict behavioral responses, and so on.” Although I agree with Rodrik’s argument that economists can help inform the experimentation process, providing more information and perhaps lowering the risk, I wonder if the need for experimentation lends itself to growth strategies tailored even more locally than the national level. Perhaps instead of trying to develop a national level strategy for growth, countries should try to foster local level growth within their borders. Under such a model, there would be more room for the trial and error process, less risk with failure, and on a smaller scale changes might mature more quickly expediting the learning process. On a bit of a side note, this paper made better use of graphs and tables than almost any other academic paper I have ever read. There were so informative and easy to understand. Also, his language was mostly so accessible. It was very refreshing.
Toggle Commented Oct 2, 2019 on Rodrik article for Thursday at Jolly Green General
Krugman’s argument for the importance -even necessity- of models in economics is powerful and fairly irrefutable. It is hard to imagine explaining almost any economic concepts without graphs and equations. Further validating his argument, he acknowledges that modeling has limitations. Models must be understood as simplifications of very complex systems constrained by an economist’s resources, which include the knowledge that they have at the time. For example, “high development” theorists were limited in their ability to produce models because they did not know how to model economies of scale. Unfortunately, this led to the neglect of their theories by economists who were able to present their own ideas in more formal models. Eventually, their ideas would come back into the mainstream as modeling techniques became more advanced. However, the lag in their adoption was significant, and there may have been truly beneficial economic policies lost during their period of neglect. To conclude, Krugman advises one, “not to let important ideas slip by just because they haven't been formulated your way.” This is I believe is the most important part of Krugman’s paper when it comes to development economics, and unfortunately the least likely to be heeded. When it comes to development economics, it seems to me that there is a lot we cannot yet model. Especially when thinking in a Senian framework--how can we fully model the importance of various freedoms and capabilities in a mathematical framework? I am sure that our ability to do so is getting better with each year and with increased access to data. However, just like with the original theories of “high development” there will be a lag in our ability to create models that take into consideration such factors. It is vital that we learn from the past and keep in consideration these things that are intuitively important even if they cannot yet be modeled. As Krugman argues, models are important for allowing us to understand complicated interactions and systems, but they are not everything. They must be constantly adjusted with new information and understandings, and they cannot be the sole basis for policy because they are simplifications and significantly limited.
Toggle Commented Sep 25, 2019 on Reading for next Thursday at Jolly Green General
Oops I forgot to include a link to the article-- Here it is:http://www.fao.org/3/a-i3940e.pdf
Before I read the Wang, Wong, and Yip article I had just read a portion of a report by the FAO about sustainable food and agriculture for another class. The report could not help but inform my reading of the Wang, Wong, and Yip article, and led me to question some of their conclusions a little bit. The Wang, Wong and Yip article underscored the importance of government policy in development. They argue that the state must support open trade policies, push towards an exports dominated economy, and promote high tech innovations and industrialization. All of these policies make sense to me except to some extent the necessity of promoting high tech investment and industrialization. It seems that there may actually be an avenue for development through innovations in agriculture, and in fact this may be a space where lag-behind and trapped economies could begin to pull forward. They mention several times the failure of various states to move beyond an agricultural based economy and how this has either caused them to become trapped or lag behind the development of the U.S. and other countries. However, it seems not so much that the agricultural economy itself was the problem, but rather the reliance on just a few key exports. For instance, Kenya relied heavily on the exportation of coffee and tea, and when prices for these goods decreased dramatically it had serious consequences for Kenya’s economy. Moving towards a more sustainable agricultural system, where no one crop dominates, could lead to more stability for these agricultural societies without the need for industrialization. As the world population continues to grow, more and more food production will be necessary. All agricultural societies need not be abandoned but rather invested in as a valuable resource for the world. Wang, Wong, and Yip argue for the need for “absorption, adaptation, and creation of technology” in a move towards industrialization. However, this innovation and creation of technology can be achieved through agriculture as well, and the FAO report, like the Wang, Wong, and Yip paper, argues that investment in technology is necessary for sustainable development. In the FAO report, they argue for increased access for crop farmers to markets through “capacity building, credit, and infrastructure,” as a means towards both more sustainable development in agriculture and ultimately sustainable development overall. The argument for increased access to markets actually sounds a lot like the main argument of the Wang, Wong, and Wip article--that institutional barriers are the largest factor in lack of development. Thus, it seems that societies need not necessarily move away from agriculture entirely, but rather focus on sustainable development of agriculture instead. This will set them up to feed a rapidly expanding global population, and position them for further development.