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Unformatted text preview: Study Guide: Readings Ch. 1 in Poor Economics 1 in thirty chance of dying when giving birth compared in developing nations to one in 5600 chance in developed nations Dont think of poverty as overwhelming, but as a set of concrete problems that can be solved one at a time Countries are poor because: o They are hot, infertile, malaria infested, landlocked o Harder for them to be productive w/o investment o Poverty trap o Foreign aid critical in jumpstarting areas to make country more productive Easterly: aid prevents people from searching for their own solutions Rwanda has benefited strongly from aid, but has others? o Poverty not just about having money, but also not having the capability to realize ones full potential o Government or NGO fighting malaria? o Should bed nets be given away or sold? Sachs: give them away b/c it would entice them to do what UN thinks is good for them Easterly: giving them away would corrupt government and will interfere w/peoples freedom: dont force people to do what they dont want to do Trapped in Poverty o Sachs: yes b/c of geography or bad luck. Emphasis on the big push Your income today is influential on your income in the future Leads to S-shape curve (very flat in the beginning, rises rapidly before flattening again Income in the future is lower than today leading the poor to become poorer; those who start outside of the poverty zone, income in the future is higher than income today so the rich become richer o Easterly: no poverty trap b/c many countries that used to be poor are now rich and vice versa o Most economists believe that theres no poverty trap Poorest people earn more income than what they started w. people become rich over time and eventually, income stops growing; theres relatively little we need or can do to help the poor Shift in perspectives occurred due to high quality data from poor countries and randomized control trials What Bono Doesnt Say About Africa by Bill Easterly Stereotyped Images perpetuated by westerners patronize Western policies designed to rescue the allegedly helpless, therefore discouraging those policies that might actually help Typical African is a long way from starving; need more resources beyond peacekeeping In some sub-Saharan countries, the GDP is growing; growth of living is highest in africas history o Foreign private capital has increased more than foreign aid; Africans saving a higher % of income than Americans International community making Africa look worse than it really is. It will be hard International community making Africa look worse than it really is....
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This note was uploaded on 11/16/2011 for the course ECON 345 taught by Professor Jakiela during the Fall '11 term at Maryland.
- Fall '11