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Mercer Peek
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This paper measures aid that comes from the U.S. and names the U.S. being the biggest source of ODA gross disbursements. While the generosity (or lack thereof) of the U.S is not the point of the paper, I think it gives a misleading idea that the U.S. is a leader in funding development aid. This could be dangerous if it leads to complacency on the part of the U.S. I recall discussions at the beginning of the term about how, in terms of percent of GNI, the U.S. is actually one of the lowest contributors of development aid. In the UNs report on progress towards the Millennium Development Goals, only 5 countries have contributed as much as their target since 2000. The U.S. is not one of them. The target is measured in terms of percent GNI. While the U.S. might provide the largest dollar amount of funding, they are still not doing as the UN asks. The figure on page 3 plots the percentage of ODA aid that comes from each country. The U.S. contributes about 25% of the budget; Japan is second at just under 20%. The U.S.’s GNI is 20.84 trillion. Japan’s GNI is 5.6 trillion. I think an uneducated reader could walk away from Milovich’s paper with a false sense of who is contributing what to global development aid. Milovich concludes that alternative measures of poverty could help us to understand the relationship between aid and poverty. I would add that examining alternative measures of aid could help us to understand the relationship between aid and poverty.
Toggle Commented Nov 13, 2020 on Last Post of the Year at Jolly Green General
I agree with some of my classmates- after returning to this paper multiple times, I haven’t quite gotten it all down. There is a lot of technical terminology and references to fiscal policies that I have yet to learn. The literature review notes that other studies of the topic have related the pricing of international bonds to a vector of country and period characteristics. Can we discuss the limitations of this form of modelling? The authors point out that this regression can only be used when positive decisions to borrow and lend are made, but I don’t understand why that is so. The authors go on to say that their equation is better because it requires information on those who don’t issue bonds. I understand that a more complete analysis includes those who do and don’t participate in the bond market. However, I would appreciate a more detailed discussion of the differences in the mechanics of the two models.
Toggle Commented Nov 5, 2020 on For Friday's Discussion at Jolly Green General
It is interesting that while private returns to schooling are highest in Latin America and sub-Saharan Africa, they are the lowest in the Middle East and North Africa. The paper shows a general trend of returns to education falling as income increases. It is therefore unsurprising that Latin American and sub-Saharan regions, some of the world’s poorest, see high private returns to education. I would then expect wealthy countries to see the lowest returns, but it is the Middle East and North Africa. The paper attributes this to factors such as “corruption, natural resources and poor academic performance,” but I am not convinced this is the full explanation. I don’t have data, but I think that corruption in Latin American and sub-Saharan governments is on par with that of Middle Eastern and North African. It is true that the Middle East and North Africa are particularly wealthy in natural oil and gas, but so is South America and parts of sub-Saharan Africa. I also don’t think a blanket statement about academic performance is particularly convincing. I wonder if some part of this dynamic isn’t due to the fact that female rights are suppressed more in the Middle East and North African countries than nearly anywhere else in the world. 7 out of 10 of the worst countries for women to live in as listed by Georgetown’s Women Peace and Security Index are in the Middle East or Northern Africa. Women couldn’t drive until 2 years ago in Saudi Arabia. If a girl is even lucky enough to get an education, it isn’t going to take her very far if she can’t leave the home alone. Furthermore, private returns to education are 2 percentage points higher for females. If you are actively suppressing or even just not encouraging the half of your population with a higher return to education, that is really going to kill your overall returns.
Toggle Commented Oct 22, 2020 on For Friday's Discussion at Jolly Green General
I thought the temporary quota system for female policymakers in developing countries was interesting. The point that even though the women put on regional councils in India had less education than their male peers, their regions had better outcomes was striking. It makes sense that giving women a platform to voice their needs would improve living conditions at home, in the female domain. I can absolutely see how in a patriarchal society, the men on city council would ignore their wives complaining about the quality of the drinking water they collect, or that the teachers don’t show up at their kids’ schools, or any other sort of “female” domestic complaint. If there is no proof that putting women on these councils harms anything, and it often helps, it makes sense to me. However, I think that it is important to note the danger of appointing women (or any sort of sub-group or population) just for the sake of representing them. In a rural Indian village, there likely not a huge difference in the capacities of educated men and their less educated wives- I would expect them to be similarly capable to make policy for their small area. However, as you start moving up in the government and looking at larger cities and countries, it is essential that representatives be well-qualified. In most developing countries, female education is neglected or even actively ignored. It is ill-advised to put poorly qualified candidates in these positions. I agree that there needs to be female representation, but it should not be mandated until we can ensure equal qualification. I think the first mandate should be in equal educational opportunities for girls and boys (which we are seeing). Once that is accomplished, if female representation in the government is still not naturally occurring, then it could be time to think about a temporary quota.
Toggle Commented Oct 9, 2020 on Duflo for Friday at Jolly Green General
Epplin, in concluding his paper, frames an economic principles course at a public university as a public good worthy of taxpayer dollars. I would argue that right now it is almost a public necessity, especially if we are charging the public with the responsibility of electing our President and Congress. I would even argue that principles of economics should be a universal high school course, or at least required in all public colleges and universities. I cannot name the number of times I have looked at one of President Trump’s policies and thought “if most of America understood simple economics, they would not support this.” How are average Americans supposed to evaluate candidates’ platforms if they don’t understand how these platforms will play out in the real world? Without this capacity, people will vote based on a dangerous combination of flawed logic and emotion, and we will end up with populist leaders whose policies are based on personal convictions instead of economic or political principles.
Toggle Commented Oct 2, 2020 on For Friday's Discussion at Jolly Green General
What stood out to me in the World Bank Summary was the relative impact of global warming on the poor as compared to the rich. This is true both on an individual as well as a global level. A millionaire with a second home in the Caribbean will be fine if rising sea levels submerge the islands while the lives of the impoverished native residents of the islands will be destroyed. Along the same lines, developed nations will absolutely feel the effects of climate change but they will be relatively fine and more resilient than developing nations. This brings me to the paradox we discussed Wednesday. The rich people and nations are the ones that need to spur the change to renewable energy sources and sustainable practices. They are the only ones able to bear the initial costs. However, rich people have the least incentive to spend money on this change as they will be the least impacted by environmental degradation. Furthermore, the leaders of the coal industry are often some of their countries’ most wealthy and powerful. Not only do they not care about renewable energy, they have the motivation and means to really fight it. Quiggin says that “we” have the power to develop and live sustainably, but I think this power is concentrated in the wealthiest individuals and countries.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
It was good to hear Kruger refer to the field of economics as a social science- akin to sociology, psychology, anthropology or linguistics. In my experience, economists tend to disassociate themselves from such fields and align themselves with mathematicians or statisticians. In my opinion, economics is uniquely poised to bridge both mathematics and social science. Economics is its own field; it applies high level calculus and statistical analysis to advise good action. This is different than sociology or psychology, which use models or statistics that already exist to prove more abstract theories. I would argue that through regression and modelling, economics creates the statistics and models that are the backbone of other social sciences. In my opinion, economics at its best will balance math and social analysis. Kruger’s article is a good reminder that we have not always and must strive to keep this balance.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
A common theme among Chile, Brazil, and Argentina’s “lag-behind” economies is import substitution. Promoted as a developmentary tactic in the mid 20th century, import substitution means replacing foreign goods with domestically manufactured products wherever possible. As we see in the paper, import substitution can lead to short-term growth in the manufacturing sectors, but is does not lead to long-term economic gains. In the long run, domestic production and therefore GDP expansion are smaller than what they would be as part of the world market. It also concentrates power at the top of countries that, which as the paper notes, suffer from massive governmental corruption. I can’t help but draw parallels between import substitution and President Trump’s policies regarding our manufacturing sector. In fact, one could define his proposed policies to “protect American jobs” by not importing what we can make ourselves as import substitution. Especially given the increasing corruption within and cronyism between our government and top 1%, we should think long and hard before adopting such policies.
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
Sach notes that the success of “the three bottom lines will depend on a fourth condition: good governance at all levels, local, national, regional, and global.” This is a pretty broad underlying condition. Most of the world does not have good governance and the minority of countries that does tends to be the best developed and wealthiest. Germany, the Nordic countries, Canada and Japan come immediately to mind. They are in a position to help, but are ultimately not the countries that need the most help. The governments of Central and South America are inefficient at best and wildly corrupt at worst. We have the oppressive regimes of North Korea, Russia, China and much of the Middle East. Some argue that the results of the November presidential election could mark the end of American democracy; even if that fear is a little extreme, there is no doubt that cooperating with the UN to help promote sustainable development is not one of the Trump administration’s priorities. All in all, I think Sach is a little cavalier in saying “And of course we need good governance for this to happen.” He’s right, but he downplays the magnitude of this challenge.
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Aug 27, 2020