The End of Poverty_ Economic Possibilities for Our Time -Jeffrey D

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The End of Poverty_ Economic Possibilities for Our Time -Jeffrey D Powered By Docstoc
					Ch. 3: Why Some Countries Fail To Thrive (p. 51-56)
   Maize: corn
   Gross Domestic Product (GDP): market value of all final
    goods and services produced within the borders of a
    country during a year                                   *

   Gross National Product: total market value of all final
    goods and services produced by a country’s residents, no
    matter where they live, during a year                                             *

   Income Per Capita: total national income divided by the
    number of people in the nation
   Extreme Poverty: condition of people living on less than
    $1.25 per day                      +

   Capital: the wealth, whether in money or property, owned
    or employed in business by a person, firm, or corporation#
•   *Definitions from:
•   +Definition from:
•   #Definition from:
1.   Saving
2.   Trade
3.   Technology
4.   Resource Boom
     (larger/more fertile farms
     become available)
   5/6ths of the world’s
    population is at least a step
    above extreme
    poverty….doesn’t sound too
    bad, right?!
   BUT, in a world with almost
    7 BILLION people, that
    means well over ONE
    BILLION people are living in
    extreme poverty
1. Lack of saving: capital depreciation may result

2. Absence of trade: could be caused by lack of
  roads/infrastructure, violence/war, monetary
  chaos (when money isn’t a reliable medium of
  exchange), price controls, and other gov’t
  interventions that limit trade
3. Technological reversal:
   loss of technological
   know-how (can happen
   if parents die)
4. Natural resource
   decline: e.g. nutrient
   depleted soil
5. Adverse Productivity Shock: natural disasters
  like flood, drought, heat waves, frost, pests, or
  household disease

6. Population growth: household gets bigger but
  output stays the same
1.     Lack of durable housing
2.     Insufficient living area
3.     Lack of access to clean water
4.     Inadequate sanitation
5.     Insecure tenure
      How does your article compare to this list?
      Which features were mentioned?
      Were there others you identified? What are they?
     **UN HABITAT=The United Nations Human Settlements Programme, UN-HABITAT, is
     the United Nations agency for human settlements. It is mandated by the UN General
     Assembly to promote socially and environmentally sustainable towns and cities with the
     goal of providing adequate shelter for all.***
Ch. 3: Why Some Countries Fail To Thrive (p. 56-66)
1.     The Poverty Trap: the poorest can’t save because
       they need their entire income just to survive
        ▪ They actually deplete natural capital (e.g. cut down trees for
          firewood w/out replanting)
2. Physical Geography: if a country is land-locked, in
  mountains, or has no good rivers, harbors, or
  coastline, they may be economically isolated
        ▪ Other geographic limitations:
             -arid conditions (low ag. productivity; more vulnerable to droughts)
             -ecological conditions ideal for disease
     **geographic limits can be overcome with enough money; still increases likelihood of
     falling into a poverty trap***
      Central African Republic (CAR)
-7th lowest in world GDP (of 221
-48.6% literacy rate
-9th lowest life expectancy rate (50.7
years) (US is 50th at 78.37)             Stats from:
3. Fiscal Trap: Gov’t lacks economic means to improve
    ▪ 3 Reasons:   a. Little tax income from poor population
                   b. Inept, corrupt, weak gov’t can’t collect taxes
                   c. Too much international debt

4. Governance Failures: including failure to fix
  infrastructure, create positive econ. environment,
  stem corruption, maintain peace/safety, define
  property rights, enforce contracts, & defend nat’l
5. Cultural Barriers:
    cultural/religious norms
    stifle development
    ▪ e.g: women excluded from
      econ. & pol. life; no education,
      no economic productivity;
      usually higher fertility rates
    ▪ e.g.: ethnic & religious
      minorities denied access to
                                         -woman whose ears and nose were cut
      public services (sometimes         off by Taliban after being caught
      ‘ethnic cleansing’ results)        running away from her abusive husband
6. Geopolitics: Trade barriers, such as economic
    sanctions, stifle development
7. Lack of Innovation: little funding provided for
  research & development (R & D); small markets to
  test new products….so inventors can’t recoup cost
  of R & D
8. The Demographic Trap: poor families have many
  kids; more kids=less resources to care for &
  educate them; next generation raised in same
Ways to avoid The Demographic Trap:
  Educate girls; more women into workforce
  Education, laws, & social action
   for women to more easily make
   fertility choices
  Better healthcare for kids;
   parents less likely to have many
   kids to care for them in old age

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