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Sarah Hollen
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One of the things that stood out to me most about this paper was that it looked at the effect of aid on poverty—and particularly poverty as defined by the multidimensional poverty index—not simply on growth or income poverty. I think this is really interesting because it reminds me of our discussion about the returns to investments in education being dependent on other factors, such as health and nutrition. It makes sense then, that for aid to be effective, certain conditions must be in place, like functioning healthcare centers and good schools which contribute to human capital formation (this parallels the reading on trade and poverty which highlights that a beneficial relationship between these two variables is conditional on factors like education, institutions, and financial markets). When aid decreases multidimensional poverty, as shown in this paper, factors such as education, health, and living standards improve, and there is now even greater potential to see higher returns to aid as measured by income, productivity, or employment opportunities. After reading this paper I also immediately connected it to our discussions of disease burden and how specific aid targeted at fighting diseases like malaria has the potential to make significant positive impacts in the developing world, particularly through effects on human capital development. Without this specific aid, in the form of mosquito nets, for example, other monetary aid could have a limited effect. All in all, while considering this case, as well as the provision of aid in the form of de-worming medication in the case about conditional returns to education that I mentioned earlier, I am sure that targeted aid, and I wonder if even ‘in kind aid,’ ought to be a greater focus for at least initiating poverty alleviation, particularly multidimensional poverty, which would then create conditions in which returns to monetary aid could increase. *I know this approach may not actually be better/there are some tradeoffs associated with ‘in kind aid,’ but this is just where my thoughts took me after reading this paper and thinking about our other class discussions
Toggle Commented Nov 12, 2020 on Last Post of the Year at Jolly Green General
I like that this paper gives sort of a new perspective on development. We have talked a lot about the conditions and institutions in developing countries that facilitate economic growth, so it was neat to consider how something like the interest rates in developed countries could have such a significant impact on the flow of financial capital to developing countries. I also found the approach of this paper—that it sought to reconcile earlier empirical findings with qualitative evidence, using new data and controlling for important confounding variables—to be beneficial. To be honest, I didn’t really understand all of this paper and all of the macroeconomic concepts, but because of the clarity of the writing I was still able to grasp the main findings and the significance of their implications. One question I have after reading this is about how (or if) the COVID-19 pandemic would be expected to impact the flow of financial capital from developed to developing countries. Because U.S. interest rates are so low, do/will we see more foreign investment and lending to emerging economies? Will credit quality fall? Or is this not the case because of the global nature of the coronavirus shock (or for some other reason)? Finally, are these trends something we can observe now, or will they only become evident in the future as we look back on this time period? Overall, I think that considering the application of these findings to a current situation (i.e. the global coronavirus shock) would help me to more thoroughly understand the economic concepts and the results presented in this paper.
Toggle Commented Nov 5, 2020 on For Friday's Discussion at Jolly Green General
The last paragraph of this paper caught my attention. The authors write that for conditional transfers to be preferable to unconditional transfers, they must improve the lives of children. They state that “short-run benefits like increases in school enrollment do not on their own meet this standard, unless one views enrollment as having intrinsic rather than instrumental value.” For this reason, they write, their evidence of long run benefits is necessary, though not sufficient. I do agree that evidence of long-run benefits has significant implications for CCT programs and policymakers. However, I disagree with their implication about the (lack of) intrinsic value of enrollment. The use of the word ‘unless’ in the statement above implies that there may not be intrinsic value in school enrollment. I would argue that there is intrinsic value in children’s school enrollment, and that we cannot lose sight of this when we talk about and try to measure the instrumental value of education. In thinking about Sen’s work and our discussions of freedoms and capabilities, I believe that children have a right to education. To deny them education is an unfreedom; the ability or freedom to go to school therefore has intrinsic value. And since children’s school attendance is almost entirely dictated by their parents, it seems to me that we ought to do everything we can to incentivize parents to enroll their children in school and eliminate this unfreedom that so many children face. Because I believe that there is intrinsic value in the freedom or opportunity children have to attend school, and because CCT programs provide incentives for parents to send their children to school and have been shown to increase enrollment, I think the merit of such programs shouldn’t be judged only by examining the instrumental value of education.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
I know we have discussed it quite a bit in class, but after reading this paper and seeing evidence again of the enormous private and social returns to education, I am still shocked that investment in education is not more of a priority—- in some low-income countries but especially in the U.S. As noted in the paper, the existing body of literature on this subject generally measures education levels in terms of years of education, or completion of education at the primary, secondary, or tertiary level. Still, as most high income countries have universal primary education and high secondary education completion rates, turning to school quality to evaluate the returns to education (with the hope of increasing these returns by addressing school quality issues) seems like a logical next step for high income countries and something that should be considered as low-income countries invest in education. The authors mention that future updates to these models will indeed attempt to estimate returns to education based on school quality, specifically through micro studies that investigate the returns to specific school quality inputs. This reminded me of recent research that we have discussed in my economics of education class, which estimates returns to school quality inputs such as teacher quality and class size. Overall, results in many studies that examine these issues are somewhat inconclusive, in large part due to the difficulties of eliminating biases, though teacher quality is typically acknowledged to be a factor in student outcomes. As more research in this area is conducted, I am interested to see what new insights will be presented. In the context of this paper, the authors point out that North Africa and the Middle East is an outlier in the sense that private returns to schooling are low, given the relatively low average years of schooling in this region. In hypothesizing about these low returns, the authors cite factors such as corruption, natural resources, and poor academic performance. Given that the trend of higher returns to education in low-income countries holds for most regions, I think it is likely that the quality of education in North Africa and the Middle East is particularly low; as Mercer pointed out, I think this probably has a lot to do with gender disparities and the low quantity and quality of education available for girls. This presents challenges and opportunities for development; I wonder if there may be benefits to starting from the ground (basically no existing education system, very little investment in education, or overall low levels of educational attainment) when initiating investment in education with a focus on both the quantity and quality of schooling. This is in contrast to a country such as the U.S., which is struggling to reform an existing education system that generally produces high quantities of education, but education that is of low quality for many students, especially low-income and minority students who could benefit the most from high quality education.
Toggle Commented Oct 22, 2020 on For Friday's Discussion at Jolly Green General
I appreciate Duflo’s realism and her measured approach to the supposed ‘virtuous circle’ of economic development and women’s empowerment and their mutual reinforcement leading to richer and more equal societies. I found the discussion of potential tradeoffs related to women’s empowerment intriguing, as I had never really thought about or read any literature that considers any such costs. Duflo argues that women’s empowerment may not be the ‘free lunch’ for development policy that many people believe it is, though she does maintain that gender equity is a desirable goal in and of itself. While she mentions that empowering women (e.g. through enacting policies such as representation quotas in government) can occur at the direct expense of men (e.g. the explicit consequence of having fewer men in leadership positions), Duflo argues that such policies are necessary because they allow the voices of women to be heard and their opinions to be represented, and may even shape people’s attitudes towards women in politics or leadership positions. Additionally, the decisions made by women or policies targeted at women often have positive effects on women and children, enhance efficiency, and increase the size of the economic pie. At the same time, Duflo argues toward the end of the paper, there are no magic bullets, and there may be costs associated with redistribution of power from men to women which must be accounted for. For example, she mentions improvement in child welfare through components like health and nutrition but at the expense of education. After reading this paper I understand Duflo’s cautious approach to this subject, but I would be interested to know more specifically about potential tradeoffs and costs related to women’s empowerment and to see more examples of how policies directed at (or implemented by) women may give rise to some economic inefficiency or may not be cost effective.
Toggle Commented Oct 8, 2020 on Duflo for Friday at Jolly Green General
One thing which stood out me was that the author states that it was ‘intuitive’ for the founding fathers to advocate for public funding of education. Similarly, fighting for land grants which would promote publicly funded agricultural universities and research and make agricultural education available for all people regardless of class was intuitive for those who pushed forward the cause, like DeWitt and Turner. These people understood that public funding of education was crucial because it would not otherwise be adequately or efficiently provided by the (private) market. In the case of agricultural education, DeWitt and Turner knew that land grant institutions would lead to better allocation of resources and greater productivity—i.e. to efficiency and a bigger economic pie. What makes this emphasis on intuition really interesting is that near the end of the piece, when noting that the level of investment in public agricultural education and research is less than what is efficient and that the size of the economic pie is therefore smaller than it could be, Epplin laments economists’ “collective inability to effectively educate the public and our elected representatives about the existence of these market failures and the economically efficient fixes that are possible.” I think maybe he is being a bit too hard on himself and his profession because it seems to me that these concepts are no less intuitive today than they were centuries ago. Unfortunately (as we mentioned jokingly but actually kind of seriously in class the other day), today many people (and politicians) don’t listen to economists; question or deny science and evidence; and evidently don’t even understand, recognize, or acknowledge ideas that make complete intuitive sense. While there are surely ways that principles of economics classes in colleges and universities can be improved to help students better understand concepts like market failure and the role of government, and I believe there are probably ways to improve economic literacy in the general public, I am less optimistic about the prospect of politicians and elected representatives being open to or moved by arguments based on intuition. I fear that most politicians have shoved intuition away into some sort of box marked with ‘potentially hazardous to campaign for reelection.’
Toggle Commented Oct 1, 2020 on For Friday's Discussion at Jolly Green General
I really enjoyed reading both of these articles, and our discussions about development and sustainability have been my favorite topic of class so far. I was most drawn in by Quiggin’s article, and was intrigued particularly by part of his concluding paragraph. “The ultimate barriers to achieving a good life for all, free of the lash of financial necessity, are neither technological nor environmental. They are in our beliefs, values and social institutions. If we collectively prefer to stay on the treadmill, chasing bigger and better consumption goods, we can do that, at least until we hit the limits of sustainability. But if we choose to use the opportunities given to us by technology to eliminate poverty and drudgery, and to protect and restore the environment, that choice is equally open to us.” At first after reading this I was in complete agreement— our consumer culture is killing us, we need to get our priorities straight, we must think of others before ourselves, people ought to invest in sustainable technology, etc. etc. But then I thought again about our discussions of South Korean development in class the other day and about how we should be careful about relying on cultural explanations when discussing development. And while there is clearly a difference between South Korean development and the global sustainable development that we now seek, I wonder what role (if any) cultural changes will or should play in future development. Because that is exactly what Quiggin is arguing for. He says that the ‘ultimate barriers’ are in our ‘beliefs, values, and social institutions.’ In other words, our culture. This leaves me wondering: Do we need to change our culture to ensure sustainable development, the eradication of poverty, and respectable living standards for all people? Or could we instead work through markets, incentives, and government policy to influence investment patterns, consumption, and sustainable development and poverty reduction? Do we need both? Would changes in policy or incentives then end up changing cultural norms and values? Will people 100 years from now look back and explain (I hope we have succeeded in meeting our goals so that they have reason to explain our sustainable development and the eradication of poverty) our impressive turnaround by lauding changes in our culture and values that made it all possible, or will they praise our remarkable policy efforts and handle of the markets? Will one of these explanations be right, or will it be a combination of both? Does it matter? Is culture relevant in discussions of sustainable development?
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
I really enjoyed reading about development economics from a case study perspective, and I think it makes the concepts much easier to understand. Obviously, as Didi pointed out and as we have read in the Growth Strategies paper, a one-size-fits-all approach to economic growth and development will not work. Still, the case study of South Korea is fascinating and illuminates many of the factors that lead to successful economic growth. Let me preface my comments by saying that as I read this paper I became aware of how little I actually know about the history (economic and otherwise) of South Korea, so things that surprised me might be perfectly obvious to other (or most) people. One of the things that I noticed was not present in this paper—probably because it’s a paper focusing on economic development—was a discussion of the social progress (or lack thereof) in South Korea that went along with its economic progress. I was also somewhat surprised to read that South Korea’s rapid growth came under a mostly authoritarian, military government regime. Towards the end of the paper, the author briefly mentions social costs of development, focusing on the exploitation of female labor and working conditions and length of the workweek, but I would be interested to read more about how social progress in South Korea maps over time alongside its economic growth. As economic development is context dependent, it makes sense that processes of social and political progress are as well; still, I was surprised, particularly after considering Sen’s view of freedom as the means to and ends of development, that such rapid economic growth could precede the provision of many real, substantial social and political freedoms in South Korea.
Toggle Commented Sep 17, 2020 on Miracle on the Han for Friday at Jolly Green General
What stuck out to me most from this essay were Krugman’s references to maps and models outside of economics and then his comparison of these maps and models to the discipline of economics and its evolution of knowledge and use of models. I was particularly fascinated by his discussion of the ‘evolution of ignorance’ and the evolving European map of Africa. I found Krugman’s closing statement, that ‘a temporary evolution of ignorance’ may be the inevitable price of progress, particularly intriguing. He asserts that during a period in which technique improves and standards of rigor and logic rise, there will most likely be some loss of knowledge and an unwillingness to confront concepts that ‘the new technical rigor’ cannot yet reach. He compares the evolution of European maps of Africa from the 15th to 19th centuries to the discipline of economics between the 1940s and 1970s. This comparison certainly helped clarify his point about the evolution of economics and the discipline of development economics more specifically, and it even seemed logical and probable to me at first, but by the end of the essay when he restated this idea in his conclusion I found I didn’t believe it—and didn’t want to believe it. Maybe it was his use of the word ‘inevitable,’ or maybe ‘ignorance,’ which is kind of a buzzword in our society today, but I find it hard to trust in the truth of Krugman’s assertion. While I cannot deny that progress is never linear and is increasingly complicated in a complex and rapidly changing world, it is difficult to believe that our society today can and ought to knowingly accept stretches of ignorance, even if we know (or think we know) that ultimately it is likely to lead to better models in the long run. Such ignorance would likely have tremendous human impacts—on individuals, cultures, minority populations—which it appears Krugman does not really consider. Overall, I do not believe in the inevitability of ignorance as the price of progress, nor that such ignorance would facilitate the production of the best models in the long run. Krugman states that ignorance arises at least in part because improved technique raises the standard for what is considered valid data, thus limiting what is included in the model. However, one of the main reasons I am hopeful we can avoid ignorance is that our society today is becoming increasingly able and willing to consider and dig deeper into complex quantifiable data as well as listen to and seek to understand qualitative data and diverse voices. Finally, I think that to make the best models for the world we live in we cannot afford periods of ignorance, as we increasingly benefit from filling in holes in our knowledge and understanding through improved communication and greater opportunities to engage with a variety of perspectives as well as facts and hard data from a growing number of sources.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
After reading this article, one of the things that intrigues me most is the relationship between industrialization, technology, and institutional barriers. Clearly, the nature of industrialization matters for the sustainable development of a country, as Brazil for example ran up significant foreign debt in order to meet the import requirements of industrialization. On the other hand, industrialization in Malaysia moved a mining and agriculture based economy to a more multi-sector one, which contributed to rapid economic growth. Mauritius also succeeded in transforming its economy by transitioning from a reliance on sugar production to investment in a different industry- tourism. Though neither of these countries have an economy particularly driven by technology or the tech sector, there are many high growth countries that do, such as South Korea and Taiwan. I am curious about how access to technology and investment in technology affect sustainable economic development through industrialization. Specifically, are there particular institutional barriers that discourage investment in the tech industry and limit access to technology? I think it is interesting to look at a case such as Singapore, which set high-tech industries as priorities for development and became a world technology leader in electronics and biotech industries (and its economy has grown rapidly). Though I think it is clear technology is a key to sustainable development, I wonder if entrance into the tech industry will become the goal for all countries seeking to industrialize successfully. After considering this, I have many questions. Can lagging economies enter successfully into the tech industry, and if not, what are the specific institutional barriers that prevent them from doing so? If countries with low growth can in fact enter the tech industry, should they? How far into this industry should they venture? Or should they simply seek to access technology as a tool for industrialization in other sectors?
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
While reading this article I was reminded of many of the things I read and discussed during my spring term class, Global Urban Sociology. We live in a rapidly urbanizing world, which not only necessitates tremendous efforts to make urban living sustainable, but also presents countless challenges to global sustainable development. As Sachs points out briefly in this article, urbanization poses challenges to sustainable development, particularly as it contributes to ‘human-induced global environmental change’ through pollution and other hazards (2209). Furthermore, in highlighting the need for ‘new critical pathways to sustainability,’ Sachs suggests a focus on low-carbon energy systems, which would call for, among other things, new strategies for ‘urban design’ (2211). In my opinion, Sachs’ article does not focus enough on the role urbanization plays in sustainable development and humanity’s challenge of setting and hopefully meeting meaningful SDGs. Because of the inevitability of urbanization and the many valid advantages of urban life (relative to rural life, such advantages include things like better education and access to healthcare), I believe that sustainable urban development ought to be at the forefront of discussions of global sustainability. Urban centers are typically centers of innovation filled with young people, and though they may face difficulties and cause environmental challenges related to energy use, pollution, crowding, and poor sanitation, cities have the potential (and the responsibility) to lead the efforts for sustainable development and change worldwide. As commercial centers filled with young, ambitious workers, cities present tremendous economic opportunities for growth and ingenuity. As places influenced greatly by new technology and ideas and motivated by people’s searches for better lives, cities are ripe with opportunities for green infrastructure and creative solutions. As areas that are increasingly diverse and well connected, cities have the potential to grant people of all walks of life community, representation, and a voice. Overall, urban life provides tremendous opportunities for the successful realization of the three pillars of Sachs’ proposed SDGs—economic development, environmental sustainability, and social inclusion.
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Aug 27, 2020