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Each of these readings emphasize the point that low-income and minority households are disproportionately affected by pollution. Communities with a majority of the population being made up of low-income households and minority groups are known to be more exposed to air pollution. The first article specifically points out that there is an association between redlining and present-day environmental health disparities in U.S. cities. Redlining was a discriminatory mortgage appraisal practice that was prevalent in the 1930s. Cities were given one of four different grades, and “grade D,” meant “hazardous, i.e., redlined.” The authors point out that “in 64% of grade D neighborhoods, a majority of the population is POC [and] in 74% of grade D neighborhoods, the median income is low to moderate.” Further, these areas were home to more industrial facilities, railroads, and other pollution sources than the other neighborhoods. This discriminatory practiced placed these disadvantaged communities in areas that trapped them in an even more disadvantaged cycle. I was shocked to read that while rail infrastructure was largely constructed before the redlining took place, many highways were constructed after redlining occurred and were purposefully positioned to travel through “black and brown communities in U.S. cities.” These communities have been taken advantage of, being pushed towards these areas with housing close to industrial plants, railways, and highways, all of which are extremely undesirable places to live. POC and low-income groups are overrepresented in these undesirable places to live, and experience higher than-average NO2 and PM2.5 levels. When I was reading this article I thought back to one of the articles that we read for the previous class. I think that one of the reasons that there is more minority and low-SES exposure to pollution is because of their inability to move away from these areas. The two other articles read for Thursday’s class makes me think that these communities are aware of the adverse effects that the pollution surrounding them have on their health, however, they are unable to do anything about it. These households may not have the means to pick up their families and move. It is very disheartening to think that these people are aware of the negative effects this pollution is having on their families and communities yet they are unable to do anything about it. Regulatory bodies clearly give them no say in the matter and “the system has allowed, basically, low-income people and people of color to have to breathe the pollution.”
Toggle Commented Mar 29, 2022 on Last Post for the Semester at Jolly Green General
I think that this paper did a great job of taking the readers through the effects of climate policy on households. I found it very informative how the authors examined the effect by age, income, and region. In addition, I thought that it was both very interesting and beneficial for the authors to evaluate the legislation through two lenses, pessimistic and optimistic. First, like some of my classmates have said, it is very encouraging to read that these policies protect low-income households in all cases. As we have discussed in class, low-income households often are more vulnerable to climate change, but are the least responsible for it in most cases. The paper pointed out that low-income households spend a higher percentage of their income on energy compared to wealthier households. This makes sense, and it would generally be of concern that climate change would then, as a result, be more burdensome for these households. However, the policies talked about in this paper ensure that “the allocation of allowances offsets the increase in energy expenditures for an average household in the lowest income quintile, leading to a net gain for low-income households.” It left me very optimistic to learn that average low-income households are actually better off under climate policy. This made me think back to our discussion in class yesterday about the fact that in British Columbia, low-income households were less likely to support the carbon tax. Given, the policies discussed in this paper and the one that was implemented in BC are different. However, both papers discuss how policies can look out for low-income households. This makes me wonder if we make more efforts to educate low-income households about climate change and the consequences of climate policy for their families, then maybe this group would increase their support. Similarly, I found it interesting to learn that older households, who are also a more vulnerable group to climate change, incur less costs than other age groups from both the Waxman-Markey and cap-and-dividend policy. This is due to the automatic inflation indexing of Social Security, meaning that Social Security payments increase to this group when the pricing of carbon leads to inflation. Overall, I think that this paper did a great job of taking a deep dive into how burdens of climate policy are distributed amongst different age groups, income quintiles, and regions.
Toggle Commented Mar 23, 2022 on Paper for Thursday at Jolly Green General
Each of the articles discuss various negative health effects of pollution. It was not surprising for me to read that there are negative health effects associated with emissions, and many of these negative effects are more severe for those more at risk and more vulnerable. One statistic that shocked me was, “Almost all of the cities (98%) in low and middle-income countries with more than 100,000 residents fail to meet World Health Organization air quality guidelines.” Zhang makes it clear that air pollution has a negative impact on cognitive ability, threatening the human capital of people. One thing that I found extremely disheartening to read was that air pollution has more pronounced negative effects on the less educated in terms of cognitive ability. We know that climate change disproportionately affects the most vulnerable people in the world, and those people are often those living in poverty in developing nations. The air pollution in these nations is going to further impede their ability to develop their human capital and get access to opportunities to get themselves out of poverty. If children and young adults of these vulnerable populations cannot fully develop their cognitive skills due to effects of air quality, they aren’t going to be able to develop their human capital in a way that allows them to escape poverty traps. I would be curious to learn more about how exposure to air pollution can affect the development of a child, starting in utero. The results found from the same study in China also indicate that the effect of air pollution is more pronounced as people age. Something that I found interesting was how the authors pointed out the impact that air pollution can cause on important decision making. For example, I would have never made the connection between a decision that an elderly person makes about their retirement spending and the quality of air in the area surrounding that person. This just further indicates that air pollution can have profound and far-reaching effects, particularly in terms of decisions they make on a day-to-day basis. So far, we have discussed how climate change and pollution negatively affect the environment and development in great depth, so I think that it was necessary for us to also learn about the real health effects associated with these issues as well. It is crucial for policymakers to recognize these adverse health effects. If these environmental problems are not mitigated, the health effects associated with them will have negative consequences for society, particularly the less vulnerable populations who will suffer from being pushed deeper into poverty traps.
Toggle Commented Mar 15, 2022 on Papers for Thursday at Jolly Green General
Overall, I found both of these articles to be very informative; however, at the same time, I found them to be very unsettling. The Earth has reached a point that humans have never seen; the atmosphere is under extreme pressure and we are reaching the point of no return. One of major point that was made in both of the articles was that even if we completely halted CO2 emissions right now, we would still face extreme effects of climate change in the long-run due to the activities and actions that have already taken place. This was extremely unsettling and disturbing for me to read. Our current atmospheric state could still lead to the complete melting of the ice sheets on Greenland and West Antarctica. Oceans would also continue to warm for several more decades even if we stopped all emissions today. Reducing emissions, going beyond just keeping emissions at our current level, would likely only postpone climate change impacts as opposed to preventing many of them. Next, it was important that the authors of both pieces pointed out that the models that we use to predict the future of climate change and its effects are likely producing conservative estimates, underestimating a lot of effects. This is something that more people should be made aware of, especially to policy makers, when thinking of what measures need to be put in place to mitigate climate change. The consequences of climate change and global warming could be much worse than we are anticipating, so it is extremely crucial that we utilize the precautionary principle and expend all of our efforts to figure out ways to mitigate these effects. The uncertainty and unpredictability of the current climate status of our planet is extremely troubling and needs to be taken more seriously by people in all walks of life.
Toggle Commented Mar 8, 2022 on Papers for Thursday at Jolly Green General
I found this article written by Costello and Ovando extremely interesting and eye-opening. I was initially shocked when I read that about 80 MMT of wild seafood is extracted from the ocean every year, compared to global production of beef at 64 MMT. This seafood is a major source of protein, as well as livelihood for many poor households. The overexploitation of fish and the degradation of oceans is severely threatening the planet as a whole, but specifically developing nations. It was interesting to read that industrial fisheries, in developed nations, are well-managed and in somewhat good health, while coastal fisheries in poorer nations are in poor health. It is clear that governance plays a role in the health of our fisheries, and it is crucial to implement policies in order to sustain fisheries. Not only will effective fishery management benefit our ecosystems and preserve the environment, but it will also increase the food security and lives of citizens in these developing nations that are suffering more substantially. This article is extremely effective at laying out different policy options for the sustainable management of fisheries. Rights-based fishery management is of primary focus. We have talked a lot in class about the effectiveness of economic incentives, and RBFM, either through IQTs or TURFs, is an effective way to encourage people not to exploit the fisheries. I found the cost-benefit analysis that the authors did very compelling and persuasive in terms of why countries should implement RBFM. After reading this, I am shocked that 78% of global fish catch still comes from fisheries that have not yet adopted RBFM. The authors show us that when comparing the costs and the benefits, the net economic benefits of RBFM expansion would be $35 billion to $75 billion. I can see that many fishers would want to continue to operate in open-access fisheries, with no restrictions- no one is going to want to have added restrictions. However, I think it is crucial that we find ways to get more people to be open-minded and understand the benefits of this management structure. Fisheries could increase in value and food security and conservation could increase if we are able to associate property rights with fisheries.
Toggle Commented Feb 9, 2022 on Paper for Thursday at Jolly Green General
I really enjoyed the Food, Farms, and Fisheries Webinar this evening, especially since we have been talking about agriculture and have read about fisheries during/for recent classes. I gained a lot of knowledge from Professor Fisher and Niquole Esters during the first two presentations, and then was left with a more hopeful mindset after learning more about W&L's progress towards sustainability from Kim Hodge. Last week's Webinar focused on what sustainability is, with a lot of talk about implications for the future. However, Professor Fisher made me think about sustainability in a different way. When thinking comprehensively about sustainability, there is a lot that we can take away from the past and historical legacies. Archaeology allows us to examine the times of our past, and we can learn things from that past about sustainability when it comes to agriculture. Professor Fisher gave a few examples of times when some communities doubled-down and committed to one form of agriculture during climate crises and suffered, and when others were able to navigate these times well with more sustainable agriculture. When she talked about the Mimbres and the Zuni compared to other Native American tribes that suffered, she explained that these two groups were able to use the same technology, but in sustainable ways. This made me think back to Quiggin's article. He explained that we have the necessary technologies today that can allow us to maintain consumption without destroying the planet, we just have to figure out the right way to use them. As a society today, just like the people of the past, we have to be able to be flexible and adapt during climate crises. Professor Fisher made me realize that we need to be able to diversify in order to make it through period of climate stress. Focusing solely on a limited range of practices is risky and leads to rigidity traps. If we want to be sustainable in terms of agriculture in the long-run, we are going to have to start being more flexible. After hearing this talk, it makes me worried that as a society today, we are so committed to large-scale industrial agriculture and I am curious if there is any way that we can fix this.
Toggle Commented Feb 8, 2022 on Next Webinar Monday at Jolly Green General
This article made me think about how China, one of the world’s largest economies, can have so much power over developing nations like Brazil. The relationship that the two countries have with each other is mutually beneficial in some ways, however it is much more detrimental to Brazil in terms of environmental impacts. China is able to continually exploit the natural resources of Brazil because Brazil relies on China as its largest trading partner to fund its economy through the purchase of natural resources. First, it is extremely saddening to see that the money that Brazil is receiving from trading with China is influencing the politics of the country through weakening environmental protection in this extremely biodiverse area. Something that really stuck with me was the statement that the authors made about the Santare´m-Cuiaba´ railway. They said that this railway, which cuts through Mato Grosso and Para, has long been in Brazilian development plans but has not launched as a result of high costs. However, since China is a world superpower, they could easily finance the railway and cause huge environmental destruction. The authors point out that Brazil has “the largest stock of remaining tropical forest, and the pressure of this [timber] demand is bound to focus on Brazil once available stocks elsewhere are exhausted.” The soybeans exports are of primary focus right now, but it is troubling to read that countries might start using Brazil for a wider array of commodities than they are now as well. This makes me wonder if strong world powers like China are going to continually keep doing this to developing nations and if we ever really are going to make any progress. After reading this article, I made me think that we could get to the point where Brazil is almost completely deforested and lacking the natural resources that were once most abundant in the country.
Toggle Commented Feb 2, 2022 on Reading for Thursday at Jolly Green General
I found the Sustainability Webinar extremely interesting and informative. I enjoyed getting a more thorough understanding of what sustainability really is and what the Anthropocene truly means, followed by an inspiring story about Julianna’s company, Terravine, that is working to promote sustainability. After the first two presentations, it made me more hopeful to hear about this growing company that is continuing to innovate in ways to produce countless sustainable products. To begin, I was intrigued by Professor Casey’s point that sustainability is a moral obligation to the future, but we do still have a moral obligation to the present. He pointed out that people often think of sustainability as solely giving up things in the present so that we can consume in the future, and that people think of sustainability often times only in terms of the environment. However, the first two SDGs are the elimination of poverty and zero hunger, which deal with meeting present needs and wants, and it is not until goal #6 that the environment is directly mentioned. The 3 pillars of sustainability deal with more than the environment; they are environment sustainability, issues related to social sustainability, and economic sustainability. Another point that really stuck with me was one from Professor Casey’s initial presentation, and one that I remember reading about in Quiggin’s piece. As evolved humans with enormous technological capabilities in our society today, we have the capacity to consume in a way that leaves us just as well off as we are right now and leave the world in a position where it is better for future generations. However, it is not a question of if we can do these things (because we can), but it is a question of will we do these things. Professor Humston went off of this point with his statement that increasing population is not the problem, consumption is. The issue of overconsumption is at the root of irresponsible resource use. It was shocking, and very disturbing, to me that if all the world’s population matched the US per-capita consumption rate, then we would need 5 Earths to support sustainably the level of consumption across the globe. This made me really wonder: will large companies who have profited from years of production techniques that have polluted our atmosphere actually make the switch to sustainable methods? Right now, firms don’t have to pay full costs of pollution, instead they are able to pass off those costs to the environment. What will it truly take to incentive these firms to change their ways (because I truly don’t believe they will do it out of pure concern for the environment and future generations)?
Toggle Commented Feb 1, 2022 on Sustainability Webinar at Jolly Green General
Together, these articles emphasize the importance of the tourism industry in Belize and Barbados and the consequential importance of environmental conservation of these places. Both places are heavily dependent on the tourism industry, and as a result, highly dependent on the quality of the environment. The article that talked about marine policy in Belize was extremely interesting to me. I was surprised at the conclusions that the authors reached: that PACT had charged tourists leaving Belize a $3.75 conservation fee for over 20 years, and suddenly changed the fee to $20 but tourists are still willing to pay that, or more. When I first read this, I thought that tourists would see the extreme jump in the fee and have hesitations about paying $16 more than they previously would have had to. However, a $20 is not a huge expense compared to the costs that the tourists are paying as a whole for their trip to Belize. The results from the study indicate that about 80% of tourists are willing to pay higher exit fees when these revenues are used towards protecting the environment. This article relates to the article about Barbados because it seems that tourists are willing to pay for conservation efforts in these tourist destinations because they value clean beaches and the amenities, experiences, and activities that come with these conserved areas. If environmental degradation is not prevented in these places, tourists will likely stop traveling to them. After reading about the results from both of these studies, it seems that both these places, as well as other Caribbean islands and tourist destinations, are able to impose or raise exit fees without harming their levels of tourism. The Belize Barrier Reef is responsible for approximately 30% of national GDP and “long-term projected rise in sea levels are likely to impact more than 40 percent of hotels” on Barbados. These statistics highlight the importance of environmental conservation in these areas so that these places can maintain their levels of tourism to support their economies. Both articles made me hopeful that other places will realize the ability to impose these fees to increase their revenues directed towards conserving the environment. The authors also mention that places could receive more conservation financing through the use of targeted fees for specific activities, which I think would be viable as well.
Toggle Commented Jan 25, 2022 on Readings for Thursday at Jolly Green General
I found this post very interesting and eye-opening. One of the major key takeaways from this paper was that microfinance providers need to realize that providing working capital loans to microentrepreneurs is not the only goal; microfinance providers need to evolve and improve their services and products in order to meet the varied needs of the poor. The first thing that really stood out to me was how much the design really matters and makes an impact; even very small changes, such as more flexible repayment options, can yield significant results. If the poor were given a two month grace period, we would see increased investment in businesses and higher average profits in the following years. The paper pointed out that grace period borrowers "saw 30% higher average profits" and "invested 6% more of their loans in their businesses." In addition, giving cash to women had very notable effects. Women have higher loan repayment rates and tend to put more of their earnings back into the home or into child services, as compared to men. It has been shown that women invest less in their businesses, and allocate more money to household purchases or other expenses. I think this a very important finding to note, and it is one that has come up in class continually. Empowering women through giving them more access to credit can have major implications for development. Women will more likely invest in human capital, such as health and education, for their children, which will have great long-run positive impacts for society. Lasting, I thought the section of the paper that talked about savings design was very compelling. It is important for policy makers to consider the fact that often times the poor don’t have the ability to save enough for productive investments. The poor are faced with various challenges such as temptation and having to value/think about the present more than the future. Savings design can be used to help savers overcome these challenges. It was very surprising to me that even small reminders to save had a somewhat large impact on savings. These reminders put the future in perspective for people. In my behavioral economics class, we have learned about nudges that can influence the behavior of individuals. These reminders, letters or text messages, are serving as a nudge for these people to save; it influences their behavior in the way that it increases average savings balances overall by 6%. Even more so, when the reminders referred to a specific purchase goal, average savings balances increased by 16%. This made me realize the greater point that even very small policy changes can make significant impacts.
Similar to what some of my other classmates have stated, I found this paper by Eichengreen and Mody a bit difficult to read. I don't have a lot of knowledge of or background in financial markets, especially emerging markets. I thought that the authors could have done a better job of explaining some of the concepts in greater depth and possibly writing in less technical terms. One thing that I was able to pull out of the paper and something that I found interesting was the overall broad concept that US markets can have a great impact on emerging markets. I appreciated how the authors pointed to experiences in the 1920s, 1970s, and 1990s. I found it interesting to read the different examples that the authors provided, even though I wasn't able to follow along with everything they were saying at times. It was interesting to see connections between what happened in the 1920s to what happened 50 or so years later. I found the Brady Plan and its impacts to be interesting. We saw capital flooding back to emerging markets as a result of structural reforms. This stimulus in lending was associated with bringing inflation under control, strengthening fiscal positions, increasing exports, reducing the deficit, and increasing privatization. However, the authors pointed out the influence of external factors as well-- that declining interest rates in major money centers played a role in the recovery of lending. This conclusion ultimately leads to the conclusion that interest rates in the major money centers and the Untied States are extremely important in influencing international lending. It was interesting to learn more about how industrial countries can have such an impact on emerging markets. The authors pointed out that when industrial countries have low interest rates, capital flows to emerging markets will increase. This paper made me realize just how dependent emerging markets are on industrial countries like the United States and other major money centers; they are much more interconnected than I realized before reading this paper.
Toggle Commented Nov 18, 2021 on ... at Jolly Green General
This paper by Psacharopoulos and Patrinos builds upon our many previous class discussions about the importance of investments in education in development. As I was reading this paper, I became even more disappointed by the fact that many countries still fail to make the necessary investments in education despite all of the empirical evidence suggesting the wide array of benefits from educational investments. Human capital is a critical piece to human development, yet it is still defined by underinvestment. It is shocking that, despite this clear evidence of the positive private and social returns to education, investments in education is not more of a priority (it should be of top priority). These statistics about the returns to education should serve as a catalyst for countries across the world to pump investments into education, yet we still see little to no investment in many countries. Over the 70 years looked at here, the private rate of return to an additional year of schooling is 8.8%. We also see that returns to education are higher for low income countries. We have learned in class that these low income countries have very low levels of human capital, therefore, these investments in education significantly positively impact their lives through improving their human capital and providing increased access to opportunities. It is extremely disappointing and shocking to me that policy makers across the globe have not shown more of an urgency to increase investments in education, especially in low income countries, despite these overwhelming facts about the positive benefits. The benefits of this increased education go beyond higher productivity and higher earnings for people; there are various social benefits that we have extensively talked about in class that make these investments all the more worthwhile. Investments in education for low-income countries especially could push them out of the low-level equilibrium trap and significantly improve their quality of life. Something that made me feel even more strongly about this point was the fact that the social rates of return reported in this paper were underestimates of the true returns. The authors state that, "Monetizing the value of just one externality of education - reduced mortality found that the social rate of return to investment in one extra year of schooling in low-income countries is 16%, relative to 11% based solely on earnings differentials." It is clear that there are very high returns to education and that policy makers need to take that as a signal to focus on education as policy initiative. In addition, I was particularly drawn to the discussion about female returns to education as a result of our discussions last week about women's role in development. The authors explained that the returns to female education are higher than those to male education, by about 2%. This finding just reiterates the obvious point that we have mentioned multiple times in class and have read in pieces such as Duflo's paper: educating women should be a top priority among development policies.
Toggle Commented Nov 10, 2021 on For Friday's Discussion at Jolly Green General
Duflo's paper about women's empowerment brings up many interesting and insightful points about gender inequality and development. In class, we have constantly talked about how empowering women, especially through increasing their access to education, will have extreme benefits to society as a whole. Investing in women's education will have great social benefits for the world; positive externalities are associated with improving women's access to education, increasing economic and political opportunities, and increasing their autonomy. Duflo reiterates this idea in her paper. She explains that women play a fundamental role in development. Not only is it equitable to promote policies that level the playing field for women, but it will have "beneficial consequences on many other society-wide outcomes," as well as improve efficiency. One piece of the paper that I found very interesting was the mention of micro-credit schemes. Duflo points out that, "Micro-credit schemes, for example, have been directed almost exclusively at women, because, it is argued, women invest the money in goods and services that improve the well-being of families, in goods that are conducive to development." This stood out to me because it is something that I recently learned about in my Behavioral Economics course this semester. We learned that in societies that value women equally, if not more, than men, there is better provision of public goods. I think this point just goes to show, yet again, that investing in women and giving them the same opportunities as men would have positive societal benefits. In addition, I think that Duflo did a great job presenting the facts as they are. I really appreciated the realism that she incorporated into her paper. Duflo recognizes and points out that promoting equality for women and targeting development policy towards women can come at the expense of men. For example, she brings up that giving more leadership positions to women, through a quota system for example, will be consciously taking away opportunities for men. She allows the readers to recognize that there are trade-offs that come with these kind of policies aiming to help women. However, in my opinion, these types of policies are necessary; they are worth these trade-offs. In our world today where women have been continually suppressed and viewed as subordinates and "lesser than," uplifting women through policies that promote empowerment as crucial, even when they come at the expense of men; the injustice and inequality that has been present for hundreds of years needs to come to an end. Women deserve to have equal opportunities and access in society, as well as have their voices be heard and valued just as much as men. There needs to be a redistribution of "power" in our world so that women and men are seen as equals. While Duflo explains that women's empowerment is not the "magic bullet" for development policy, it is a major stepping stone.
Toggle Commented Oct 27, 2021 on For Friday's Discussion at Jolly Green General
The World Bank's Executive Summary points out that the impacts of climate change and global warming are already make an impact on the world and will continue to do irreversible damage if a change is not made now. This has adverse implications for development because the poor and underprivileged are being hit the hardest and will continue to be the most seriously affected. Our discussions in class last week revolved around agriculture, touching on how many of the poorest communities rely on agriculture, particularly subsistence farming. Many of the poorest people in the world are dependent on agriculture for food, which is leads to serious issues within these communities with rising temperatures and sea levels. The World Bank Group notes that there will be "large and severe crop yield losses for warming levels above 2°C." Maize productivity is likely to face a significant decline. Maize, along with other crops, are very important export commodities for many countries. Therefore, if these crops are increasingly hard to produce productively, these important export systems will suffer as well. Countries might have to start relying on importing foods, which makes them vulnerable to agricultural impacts in other countries, as well as vulnerable to increased food prices. In all three of the regions mentioned in the report, rural populations will be extremely vulnerable to these agricultural changes due to increasing environmental strains. Development broadly aims to reduce poverty, which will be impossible if these poor communities struggle even more to need their basic needs, particularly concerning nutrition. The report mentioned that in the Middle East and North Africa child malnutrition is highly plausible with sharp declines in yields and an increase in food prices. Decrease food security will be one of the major consequences for the poor communities in these countries with the increasing strains from climate change. Now is the time to act on these environmental issues before it is too late, not only for the sake of the environment but also for development. Development will be almost impossible in a 4°C world, and very difficult in a 2°C world. Governments and international organizations need to come together, stop ignoring the issues, and start to enact policies and initiatives that address these environmental issues.
Toggle Commented Oct 20, 2021 on For Friday's Discussion at Jolly Green General
I found this article about the history of South Korea's development very fascinating. After hearing South Korea's development strategies being mentioned in previous classes, it was helpful to get a more comprehensive understanding. An aspect of Seth's article that I found very fascinating was learning about South Korea's focus on education and investments in human capital. I think it is evident that South Korea's expansion of education and promotion of human capital investments was very impactful for their economic development. South Korea's history is major evidence that this works. The rapid expansion of education heavily contributed to the economic takeoff of the country. Seth states that enrollment in primary schools tripled, secondary schools enrollment increased more than 8-fold, and higher education enrollment saw a 10x increase. In 1961, South Korea was the "best educated work force of any country with a comparable income level." From 1961-1996, this educational development proceeded rapidly. Secondary education became close to universal and higher education enrollments reached the levels of developed countries. South Korea also focused on acquiring key technical skills and promoting technical education. Seth tells us that, "The state created a number of centers to promote research and the dissemination of technical knowledge to business enterprises." Reading about South Korea's development success and learning about their focus on education makes me think that focusing on human capital investment, such as education and health, are just as, if not more than, important as the institutional factors that we have discussed. We have discussed many times in class that economic development is more than just increasing GDP and incomes; social investments are productive in raising economic growth, which was a major point brought up by Sen. In my opinion, these social and human capital investments should be a crucial component of a country's growth strategy, not something you wait for once you experience growth/do after the fact. Economic development should be approached from a more broad and holistic perspective, with a focus on human capital investments.
This article was very interesting to me, and I think that it makes a strong argument regarding the role of institutional barriers in the development process for various countries. Wang, Wong, and Yip push readers to see the broader implications of government in regard to sustained economic growth. The authors show us that correct institutions need to be established; better access to capital markets, international trade, and industrialization are crucial for economic growth. The article made me think about just how intertwined politics and economics are. The authors identified unnecessary protectionism, government misallocation, corruption, and financial instability as key institutional barriers causing countries to fall into the poverty trap or lag behind other countries. Many of the development laggards experienced government corruption and inefficient allocation, as well as political upheaval, as opposed to governments that had undertaken serious reforms in labor and financial markets, like those of the fast-growing countries. The governments in many of these lagging countries are not working to implement initiatives like the Five-Year Economic Development Plan in South Korea or the Ten Major Construction Project in Taiwan. Political institutions are primarily the ones that have to enact these initiatives and policies to promote development goals. After reading this article, as well as Sen's piece, I think it is obvious that political institutions are key to successful development. I think this idea corresponds to a point that we have talked about time after time in class: rising GDP does not directly translate to development. Sen talks about development as freedom; freedom as a means and ends to development. Freedom requires the removal of major sources of unfreedom, such as poverty, tyranny, poor economic opportunities, social deprivation, neglect of public facilities, etc. Countries need to have stable political institutions in place that will provide political freedoms, economic facilities, social opportunities, transparency guarantees, and protective security. In this paper, Argentina is a prime example of a country lagging behind in development due to many unsuccessful interventions by the government; the country lacks a stable government that is able to push them towards development.
Toggle Commented Sep 29, 2021 on For Friday's Discussion at Jolly Green General
This paper by Krugman helped me to gain a better understanding of high development theory and the evolution of development economics. It also provided great insights into economic models and their use. Models are used constantly in economics to provide insight into why a complex system behaves the way it does. We make oversimplifications and assumptions about reality that allow us to better understand economic behavior. I found the comparison to maps very insightful. Krugman states, "Models are maps rather than reality." Economic models are merely just the simplest starting points of understanding a much more complex story. It is important for us to keep in mind that the models don’t accurately reflect reality. Understanding models, but also understanding their greater implications and the stories behind them, are essential for creating policies to do things like combat inequality. Krugman effectively explains the use of modeling in economics and how it fits into the history of development economics, and especially how the big push model relates to both. I found the evolution of development economics particularly interesting, especially as it relates to the speculation that Krugman brings up about if real world economic policy would have been significantly better if development economics hadn't decayed as it did. Beginning in the 1950s, mainstream economics became more and more formal in regards to modelling, and it proved difficult for development economists to model development theory in this formal way. As a result, high development theory faded out as there were no formal models backing it up. It was in the 1980s that more sophisticated modeling techniques were able to make room for high development theory. Krugman only touched slightly on the implications that this might have had for the real world and I think it would be interesting to see if one could dive deeper into that. It would be troubling to find that if this fall in development theory hadn't occurred, real world economic policy would have been better over the years and developing nations would have seen greater success, and success much sooner than many of them now. However, this would likely be hard to study.
Toggle Commented Sep 22, 2021 on Krugman for Friday at Jolly Green General
For me, this paper introduced me to Millennium Development Goals and Sustainable Development Goals for the first time. I really enjoyed Sachs' discussion about the transition from the MDGs to the SDGs. I particularly appreciated how Sachs clearly recognized the strengths and weaknesses of the MDGs, and noted how the SDGs could combat some of the weaknesses associated with the MDGs prior in order to achieve better success. Sachs mentions that in order for the SDGs to be successful, societies worldwide need to "invest adequately in their success" and the private sector has to be fully engaged (Sachs 2211). Early on, Sachs pointed out that, "Well over half of the 1 billion people with a low income are living in middle-income countries, which means that they are living in societies with the financial and technological means to address their remaining poverty" (Sachs 2208). The fact that many people living in poverty live in countries that have the means and resources to combat that poverty is alarming; Sachs effectively brings this to attention. Brazil and China are two of the few countries that have worked to bring many people out of poverty, which is what many more countries should be doing. Why can’t countries with the resources to bring people out of poverty doing so? Societies need to be investing in the success of the SDGs so that the living conditions of people worldwide can improve; governments and the private sector equally need work towards the progress. When reading this paper, I had a thought similar to Jacob's. I began to think about how large corporations and companies today are stressing ESG initiatives, goals, and investing, which is important for the idea that the private sector needs to be engaged in pushing SDGs. I too have had similar thoughts about whether or not companies are pushing the development of ESG initiatives because they truly want to make tangible impacts, or if their intentions are to solely boost their image. Is there a way to make sure that these companies are following through with their promises and making developments in ESG areas? Further, in order for the SDGs to see success, we know that the world as a whole has to work collectively. High-income and middle-income economies need to be expanding the reach of technologies and resources to low-income countries. Beyond that, I think that these countries need to go even further by helping low-income countries learn how to use those resources/technologies themselves and acquire them in the future. It needs to go beyond wealthier countries just giving these countries the resources they need. The world has to work towards the full development of low-income countries as functioning, autonomous countries, instead of them becoming reliant on other countries.
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Sep 16, 2021