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Colby Boudreau
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Does Aid Reduce Poverty? Brings to light a recurring theme throughout the blog posts that we have been doing in that every issue that is talked about there appears to be the opportunity to make meaningful gains in areas of poverty and underdevelopment, but either ignorance, lack of willpower, or lack of personal benefit prevents many people and countries from tackling issues around the world. Milovich provides statistics that say for an average increase of 1% in U.S. aid is related to a lower percentage of multidimensionally poor people deprived in education, health and living standards by 0.82%, 0.36% and 0.64%, respectively. To wrap my head around this, I relate this to market inefficiencies. For example, when a company gathers resources to make products, there is bound to be a portion of those resources that go to excess waste, transaction costs, or simply defective products. This appears to be a similar situation, as there may not be a direct 1-1 relationship in the aid provided to increase in living standards due to aid slipping through the cracks in forms of transaction costs, lost potential, or non-recognition until the long term. Yet the evidence still shows that it does help, in varying degrees and dependant on the situation. But since when is no help better than making a little difference simply because it can’t be concretely concluded on the exact benefits? This brings to mind a discussion we had the other week in class about a prominent economist who abandoned his experiment because, while he hadn’t gotten enough evidence to make a concrete and legitimate argument for his thesis, he had gathered enough evidence to know with his naked eye that the benefits of the results were too important to continue depriving the control group from. The staggering amount of money that the U.S has provided aid demonstrates the pure scope of these problems, but also demonstrates the amount of potential good that can be done.
Toggle Commented Nov 20, 2019 on Next Week at Jolly Green General
I’m not sure why, but as has been the case with many of the issues that we have talked about this semester, it seems like malaria and the seriousness of the effects that it has are ignored and pushed to the side. This is a serious issue, one that appears to directly impede economic and social growth. Underdeveloped countries seem to always stay underdeveloped, and while they are working to improve their economic and living situations, most of the time the feeling is that these places are stuck treading water without actually doing anything to make legitimate improvements. Playing political games and following rigid economic policy has nothing to do with developing a country, instead just sends nations around in circles. While worrying about international relations and arguing about trade policy affects a nation’s performance, countries routinely ignore the economic, educational, and social empowerment of its citizens, young citizens, and women, all while neglecting to make the citizens health a national priority. It has been proven time and time again that focusing on individuals health and education is an essential step to start economic reform and development from the bottom while simultaneously reforming the underlying national institutions. Yet, somehow, countries continue to forgo simple steps to simple solutions that could drastically improve quality of living across the board. The most mind-boggling part of the whole paper is how cyclical poverty and malaria is. Malaria promote poverty because it renders so many people incapable of contributing to a community, in most cases is fatal, and on the other hand impoverished communities have little to no resources to prevent/treat malaria and are hit the hardest by it. With this in mind, the phenomenon where communities raise a fertility rate to combat a rising mortality rate is common, using the school of thought that parents need to have more children to account for the one that they know will pass away. In the case of malaria, this leads to larger families, larger numbers of diseases, and less resources (education, income, medicine) to allocate per children. So, while the increased fertility rate and number of children is a response to combat malaria, it just ends up allowing the disease to increase exponentially. Finally, going back to what we talked about in class, there shouldn’t have to be an economic reason to empower womens education or to prevent impoverished children and communities from contracting malaria, it should just be done. However, there is baffling economic evidence provided that says from 1965-1990 (35 years!) countries with a large portion infected by malaria grew at an astounding average rate of 0.4% a year compared to other countries average growth of 2.3% over the same time period. I don’t understand why countries refuse to address some of the simplest, yet most effective solutions to improving quality of living and starting a path towards development. If we truly want to help countries and populations begin their respective growth, a point needs to be made to stop overlooking the little things and address the issues that matter.
Toggle Commented Nov 6, 2019 on 3 readings for next week at Jolly Green General
Violence and discrimination against women is a very real issue across the world today and one that is not talked about nearly enough in todays discussions of various issues. Duflo’s article touches on many different points and brings the oppression that many women see on a daily basis to light. There are so many different issues that women have to deal with, from child marriage, sex trafficking, violence in households, discrimination in jobs, and so much more. However, one issue that has stuck out to me throughout this course the whole semester is the lack of dedication to education and providing a basis for younger generations to help develop countries. The first exhibit that Duflo uses in her paper shows the rates at which boys vs girls are enrolled in school in low income countries. The disparity between boys and girls attendance in primary school is excessive, as well as the difference in boys vs girls enrolled in secondary school. What stood out to me even more about that data was the nearly 70% reduction in female enrollment in secondary school vs primary school (60%) for males. The graph does not provide statistics for college enrollment, but I would assume the dropoff is even more significant. Developing low income countries that don’t emphasize their education overall, let alone encouraging the gender education gap, is setting both itself and its children for failure. Its been shown that the levels of education are key to developing and sustaining growth as a country, but also for them as individuals. Women deprived of primary and secondary education by default are relegated to the stereotypical home rearing and child raising roles instead of pursuing their dreams of being doctors, lawyers, or politicians. It may not seem as significant in the moment, but relegating women to these roles further entrenches these countries in their poverty traps and stagnates the attempts around the world to recognize women for the equals that they are. This is also definitely an issue in developed countries as well, but I think developing countries need to begin to put outdated norms behind them and start from scratch in trying to empower their young, women and men, and recognize that it will be very difficult to sustain growth with the majority of your population oppressed and left without usable labor skills.
This article by Rodrik was again pretty eye opening to how difficult of a process it is to get countries out of their poverty traps and help them develop into financially and socially strong countries. An example that stuck out to me the most was how China stimulated their growth by following such unorthodox methods and rejecting the Western norms and recommendations. This must have been an extremely big deal back when the decision was made, as the western society had proven that they were much further ahead in the race to grow and develop. However, this illustrates the point that every single scenario and country is completely different. As the article states, “...China relied on highly unusual, non-standard institutions. Second, these unorthodox institutions worked precisely because they produced orthodox results, … and it is hard to argue, in view of China’s stupendous growth, that a more standard, “best-practice” set of institutional arrangements would have necessarily done better.” This reminds me of an experience that everyone has had during math class, where you use the wrong method but still get the right answer, but still have the teacher tell you it is unacceptable. It must have been difficult for countries to witness China straying from the typical patterns of growth strategy, and coming out on the other side stronger and more successful. The concept of “liberalizing agriculture at the margins” is very interesting, given how the author earlier detailed the domino effect that changing one policy would have on the rest of the economy. It works to combine the best of both worlds, and may have introduced a potential strategy to relieve countries stuck in their agricultural poverty traps. But, as I mentioned, China demonstrated that each country is different, and in the case of underdeveloped countries, there are a plethora of reasons why countries may be mired in poverty. The point of the article, as well, is that countries can’t simply follow a prescribed path to growth or copy their neighbors without failing spectacularly. Instead leaders and countries should adopt the best bundle of all the available policies and resources, so that they may begin to slowly liberalize their people and economy in the short run, while more importantly focusing on the institutions for the long run. A strategy similar to China’s agricultural liberalization may help farmers begin to earn higher wages and eventually lead to a country making the jump from agricultural to an industrial or export society. This poses the question, how do we get countries to find the right balance between long term institutions and short term liberalization while simultaneously working to prevent other factors (such as corruption) from keeping said country in their poverty trap.
Toggle Commented Oct 2, 2019 on Rodrik article for Thursday at Jolly Green General
High development theory provides a potential solution towards helping countries escape their poverty traps, which is a topic that many have tried to tackle before. The core of the theory says that modernization breeds modernization, and that countries need to be committed to self investing and building and diversifying their market size. Upgrading to more modern means of production achieves greater productivity and margins, but also requires labor wages to rise so the new modern workers can be compensated better relatively to the traditional ones, as their new jobs may require more time, skills, etc. But this is where the first step of creating the circle is crucial, because an essential part of the high development theory is reaching a sustainable level of economies of scale combined with a large and/or growing market. However, this is difficult, since the transition from traditional production and techniques to modernization may be costly and naturally will cause the market to take its time developing and growing to the optimal size.Thats why paying the workers higher wages and empowering them to be a part of the modernization process is as important as the transition itself. As workers get paid higher wages, they will in turn become important members of that market that they are creating, and will lead them to be much more active participants in the market than their traditional counterparts. This then harkens back to what we were discussing last week, about how many developing countries find themselves stuck in a poverty trap, especially in scenarios where much of their economy is based off of agriculture. I think that “modernizing” an industry or workforce can be looked at two seperate ways. On one hand, it is easy to picture this process that they talk about is centered around simply taking current production areas and improving them, for example, taking a factory that produces cars and making it more modern, efficient, productive, and innovative. That begins the process of improving the economy and the lives of the employees, but I also think that modernizing a country’s economy on a large scale involve expanding and developing the industries with a more modern approach. We’ve already seen how societies that rely on agriculture are the ones that face difficult odds to escape the traps that they are in, so a logical approach would be to improve and diversify these economies, which inherently require workers of higher skills and higher wages. Only if we use the high development theory to address the issue at the root of where the trouble stems from, will we be able to begin seeing some sort of progress in these communities.
Toggle Commented Sep 23, 2019 on Reading for next Thursday at Jolly Green General
The amount of factors that go into the performance of an economy is staggering, and really demonstrates how difficult of a job it is to run a country and improve it. While things such as corruption, financial crisises, natural disasters, health issues, and poor infrastructure are all enormous factors, I found the idea that an agricultural society is considered a poverty trap extremely interesting. To me, agriculture has always seemed to be crucial due to the fact that without the farmers no one would have anything to survive on. But reading through the article opened my eyes to how truly volatile an economy that mainly relies on agriculture can be. Most crops likely don’t have a large profit margin, and countries that are stuck in that trap most likely do not have the leverage to make a change in those margins. I also began to realize how much the prices of crops and agriculture can fluctuate, along with the different yields and demands that they receive from different nations. However, as I started to understand why agriculture is can be considered a poverty trap and contribute to a struggling economy, I also started realizing that a possible solution would be to start diversifying the different areas that the economy is focused on. If a country can successfully do that, the other areas of the economy can support the nation when the agriculture is experiencing its volatility. The question is, how do we spur these laggard countries into beginning to diversify and improve their economy? As the article mentioned, many of these underdeveloped countries suffer from corruption, recession, and much more. But for me, it seems like the classic question of the chicken or the egg, which came first? Is the country corrupt because it is poor, or is it poor because it is corrupt? The poorer a country is, the more likely they seem to suffer from corrupted government and other economically destructive events, and the more difficult it becomes to right the ship. This ties into the other thing that surprised me, which was that the fastest growing countries all had export focused economies, and used that to spur exponential growth. It seems like these two things are tied together, because as a country begins to diversify away from an unsustainable and unprofitable economy, they will naturally begin to find things that other countries want to import. The real question is, how do we begin to spur this change and create a forward movement in these countries that leads to them escaping the poverty trap and finally improving their economy?
Studying poverty and how it affects people is always a tough subject, but it opens your eyes to just how little people have to survive on. While we think we might understand or begin to comprehend what people are going through, it is impossible to imagine going through a day at W&L with only $1-$2 in your pocket, a place where food and shelter is pretty thoroughly provided. But to take that concept and to try to imagine living out in the real world, in a city where the cost of living is extremely high, it seems like a miracle that people are able to somehow survive on so little. The more urbanized you go, the higher the cost of living is and the more difficult it is to live on so little. I live in New Hampshire, but this past summer I had an internship with a company in San Francisco, and spent 2 months there from June to the beginning of August. San Francisco and Silicon Valley are known for being the rising technology and startup center of the United States, if not the world. However, what most people don’t know is that the rapidly rising cost of living and influx of massive corporations over the past decade has quietly created one of the worst homelessness problems in the country. Throughout my time in the city, I lived/rented from 4 different places, which let me explore and experience different neighborhoods of the city in ways that I never otherwise would have been able to. What stood out to me the most was the dichotomy in lifestyles. Walking around the streets, almost everyone that I saw had AirPods in and were staring at their phones, but nobody seemed to notice the homeless people huddled up sleeping on the sides of buildings on every street. One of the places that I lived in was in one of the “not so great” neighborhoods of the city. I rented from a lady who works in commercial real estate, and was doing very well for herself. However, whenever I would leave to go do anything, there was a section of street on her same block where the homeless would congregate and pool their shopping carts full of gathered items, and essentially made that part of the street their area. One specific thing that stuck out to me the most from the article was how the “extremely poor” would spend large portions of the little money that they have on tobacco, alcohol, and other stimulants, as opposed to buying more food, water, clothes, or other forms of shelter. This was something that I witnessed my entire time that I was in San Francisco, as most people you would walk by usually had something to smoke or drink. When they had run out, they would rummage through the trash for food and drink, and attempt to smoke discarded cigarette butts from the ground. I mention this because it seems astounding to me that this level of poverty and homelessness is happening in one of our wealthiest and quickly developing cities, and yet no one seems to be talking about the issue or doing anything to help them. Being poor or extremely poor is a legitimate, scary problem, and one that exists in much more places than the third world or undeveloped countries that everyone associates them with, including within the United States.
Toggle Commented Sep 11, 2019 on Readings for next week at Jolly Green General
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