Monday, November 30, 2009

Can Aid Work?

Of course it can, and here are five small interventions that can transform the world.

20 comments:

  1. We have already discussed how important it is to educate and empower women. The effects are widespread, not just for the individual female, but for her family, children, and community as well. We have also touched on eradicating disease and providing safe water to those without it. Water bourne diseases are very prevalent among LDCs that lack access to safe water and sanitation. Prof. Casey’s paper “Willingness to pay for improved water service in Manaus, Amazonas, Brazil” touches on the impact of these diseases, and it provides evidence that people (at least in Manaus) are willing to pay much more than they currently do for improved water service. By now we should all have a better grasp on the impacts of microfinance and how it plays an essential role in promoting growth and development in LDCs. The last point mentioned here, “Research Drives Development,” envelopes all the above. We must research and come up with ways to improve the lives of the impoverished while promoting growth and development. If ideas and innovations can provide LDCs with the means to develop, there is no doubt that they will begin to do so.

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  2. I thought it was interesting how, of the five listed forms of aid that bring the largest impact, three directly touched on the importance of improving the health on individuals in these nations, one was educating women, and one addressed the importance of micro finance compensating for the lack of traditional credit markets.

    One of the most interesting and appealing forms of aid that the list highlights are simple investments in improving the basic health of individuals. Not only are the benefits of expenditures on immunizations and basic water sanitation immediately realizable by their recipients, but many of them are one-time costs (a vaccine against mumps, etc.) and the financial benefits of preventing diseases overwhelming outweigh the costs - especially when taking into account the unaccounted costs of lost labor, lower levels of productivity, negative impact on children's education, future tax revenue from productive citizens.

    The inclusion of educating women as a form of aid echos a common theme of our course, and mentions the traditionally unaccounted for benefits of older age of having children as well as the benefits of better health, education, home environment and opportunities to future generations of children who have educated mothers

    Not all of these options for aid are inexpensive on the scale that they need to be implemented, but some have incredible benefits for relatively low costs. While I don't believe all governmental discretionary financial expenditure policies should be dictated by a simple cost/benefit calculation, foreign aid could be an area where investments in human health could yield quick, tangible benefits for a relatively low cost.

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  3. This article seems like a summary of the practical application of our course. The 5 programs embody the major themes that we have learned thus far: empower women; microlending in the developing world; investments in human capital are important because unhealthy people are not as productive or as capable of learning; the need for research focued on the developing world. These are recurring ideas in our study of development economics; this article just provides specific examples to prove that they work.

    Development is a long-term process and focusing on one or even all of these things is not going to be the magic end-all to world poverty. However, these types of programs are a great jumping off point. We have to start somewhere and these are things that work. Educating and empowering women lowers fertility rates and improves the well-being and their children. Improving sanitation decreases the incidence of disease and makes people healthier. They can in turn perform better in school or in a job. They will in turn be more productive. Microlending allows poor persons to become entrepreneurs. It empowers persons and encourages them to invest in capital, which will allow them to continue to increase their earnings and eventually, their well-being and that of their children. Fighting disease has a similar affect to promoting sanitation--it makes people healthier and thus more productive. And focusing R&D in the developing world will develop technology that will help development.

    Development is a chain reaction; it has to have an initiation step. After the initiation, it can't help but keep going forward. If we start with what we know works, eventually the chain reaction will proceed on its own.

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  4. This article identifies 5 areas that highlight opportunities to promote development and eradicate poverty. Clearly in each circumstance aid can help tremendously. In the first instance, as we've discussed many times in class and seen through the Progresa program, educating women has phenomenal effects on poverty and creates a positive multiplier. Getting women into school may be the single most important factor in alleviating poverty and should be promoted through conditional cash transfers and subsidized education.

    In terms of sanitation, change must occur to provide the 2.5 billion individuals without proper sanitation a chance at a healthy life. Individuals subjected to this state are rendered helpless in their fight against poverty because without your health you cannot achieve economically. Aid through micro finance can also make a huge difference in the lives of millions of entrepreneurs throughout the developing world. Small loans can go a long way in changing the lives of those most desperate individuals and micro finance should continue to be developed and promoted.

    Increased research in medicine will allow doctors to better understand the diseases that hinder developing continues and their growth. We need more programs such as that implemented by Dr. Chitnis to begin moving in the right direction to control diseases such as malaria and HIV/AIDS. Research and development in the agricultural sector will also improve the lives of millions of poor, who are largely subsistence farmers who grow just enough to achieve minimum economic gains. Each of these factors has the opportunity to reinforce each other either positively or negatively, and aid needs to be provided in order to create a virtuous cycle.

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  5. This article definitely brings together a lot of important points at the base of our development class. These 5 basic strategies certainly highlight the idea that poor people have skills that they simply cannot utilize fully because of outside forces, and consequently back up the fact that people in developing countries aren't suffering poverty because they are flawed, stupid, or making irrational choices.

    It's amazing how simple solutions can be while still having a big impact. Eradicating poverty sounds like such a daunting task that it's almost impossible to imagine, but this article does a great job of showing how simple steps can have great effects. In short, people in developing countries don't need to be completely reformed; instead, they often only need a little backup in specific areas. Something as basic as a vaccine, a mosquito net, or even a toilet can have resounding effects on numerous lives as well as the economies of countries as a whole.

    Sen would like these ideas. Not only do things such as education for women, basic sanitation, small loans, and simple vaccinations increase a person's physical chances of survival, but they also boost self-esteem and freedom, giving a person a better quality of life on multiple levels.

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  6. The article mentions some of the things that we have discussed in class. The 5 areas that have been mentioned in the article are directed towards improving the health and education of the individuals in the country. This goes back to the human capital theory that emphasizes the importance of investing in the human capital of a country and its role in the country's growth and developement. Ultimately, healthy and educated citizens are the most important resources of any nation.

    Among the investment in human capital literature, there has been a special focus on investment in women. For example, improving the education level among women, increasing women's access to credit, improving women's health etc. The reason is that as economists we are looking for maximizing the returns to our investments and finding the best social outcomes. As literature has shown investing in women produces better results than investment in men. For example the paper we read in class about Cash Transfer Program, clearly showed that giving money to women was more likely to increase expenditure on food and education. Men were more likely to spend that money on alcohol and tobacco. Hence, currently there has been an increased focus on formulating development policies with special focus on women and this is certainly the right way to go. Empowerment of women in developing countries is critical to promoting growth and development in those areas.

    -Aparajita

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  7. I know we talk about this all the time in class, but this article really supported well why providing aid for educated girls can really help change the situation for many in developing countries. It points out how if a girl is continuing to go to school she'll be less likely to marry early, have fewer babies, and her childeren will not be spaced far apart. It seems here that by educating girls you can solve alot of other problems that tend to stem from a lack of education. We all know from the literature we have read in class that research proves that investments in women in developing countries provides the greatest return. Furthermore, I definitely agree with the rest of them, but most of all the "small loans big results" concept since we are actually trying to make that happen right here in our own classroom with our microfinance project. Moreover, this article truly addresses alot of the main concepts we have learned in class and how they can actually apply in real life situations to aid people.

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  8. Interestingly, sanitation seems like an extremely important idea that I feel often gets forgotten especially due to the extremely detrimental effects of malaria -- a disease intrinsically linked to sanitation and quality of local resources. Specifically, malaraia leads to growth stunting and other effects that prove extremely incapacitating in seeking gainful employment.

    The example used of Ghana is also highly interesting. My final group project in Econometrics focused on the association between poverty and gender specifically in Ghana. Interestingly, Ghanaian women had higher incomes in some areas due to their disproportionate numbers in fishing villages. However, these outcomes also directly affected their education achievement as cultural and societal issues led much of the public to conclude female education was unimportant (due, in large part, to their segregation in a mainly fishing-related job market).

    Furthemore, as preventative education has recently become more important in the USA in the midst of Healthcare Reform conversations, developing worlds should focus their efforts of AIDS and other communicable disease prevention efforts (something I believe the Gates foundating focuses on) to increase the negative effect these issues have on local populations.

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  9. I think the last point made in this article, emphasizing the importance of research, is one that we have not talked about much in class but that is very interesting. It is pitiful that only 10% of research is focused on the poor, but not surprising given that firms are profit driven. Perhaps we need to create better incentives for firms to invest in research for developing countries.

    It is encouraging that the author (and recent development economics on the whole)has recognized the importance of empowering women. If implemented correctly, programs in this area have the most potential for improving the lives of the poor and progress in each of the other areas mentioned will expedite this empowerment(microfinance, eliminating disease, and better sanitation and water).

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  10. The same thing that stood out to Caroline stood out to me. We have talked a lot about the benefit of educating women, microfinance, and the effects disease has on the poor thus far, but we have talked little about the amount of research devoted to the health problems affecting the world's poorest populations. We have heard a lot of staggering statistics this semester but its unbelievable to me that the diseases affecting the poorest 90% of the world (all the ones we have talked about) receive 10% of funding for health research. These horrible diseases (malaria, AIDS, etc.)cause such problems for people in LDCs and yet only a mere fragment of the amount of money allocated for curing diseases actually goes to curing them.

    As Logan mentioned, groups like the Gates Foundation are devoting themselves largely to this type of research. But more needs to come. Because, as Caroline points out, research institutes are driven by profits, they often neglect researching the hardest dilemmas, knowing they cannot guarantee a monetary gain. I know this is a cop-out solution, to say philanthropists need to step in, but it will undoubtedly help and give researchers the means to work towards helping NINTEY PERCENT of the world's population that desperately need it.

    If no one else is willing to step in and help fix this unfortunate truth (not Al Gore's), those with the biggest hearts and biggest wallets need to do so.

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  11. When I first saw this article, I thought immediately on the New York Times Magazine's special this summer called "The Women's Crusade", which spoke of how educating women is the issue of our times and will eradicate other severe world issues such as poverty, disease, etc. Educating women will definitely alleviate problems in some of the other points made, such as children's health and it will allow women to effectively start and succeed in having their own business. I think that the reason the NYT piece was so great was that it really brought attention to the issues. When more people find out about microfinance, huge differences will be made. I also thought it was interesting that research was mentioned in this article since we have not touched on that before and I think Caroline brought up a good point by mentioning that we need to create better incentives for firms to invest in R&D in developing countries.

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  12. I recently applied for a fellowship, Princeton in Africa, which works to propagate various forms of development on the continent that needs it most. Perhaps unsurprisingly, each of these 5 areas are targeted, whether directly or indirectly.

    Arguably, an emphasis on female education can indirectly stimulate development in all other areas. Not only does the education of females stimulate the production of a more able workforce in the present, but in future generations as well. More educated women today means more education children in the future, i.e. an education population and economic, political, and social development for a nation at large.

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  13. These five types of aid seem to summarize the main points that we have discussed throughout the semester. All five of these types of aid are attacking the poverty at the core instead of being band-aid type programs. By focusing the efforts at the main causes of poverty, the aid is much more sustainable and effective.

    The idea of improving the poor’s access to water and sanitation is important. I experienced this first hand when I volunteered in Soweto, South Africa. In the informal settlement that I served in they had one water spicket for the entire community. There were long lines and it took a long time to walk to get to. This simple problem spirals down and causes many other negative consequences such as educational and heath impacts.

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  14. I can't believe we dont dedicate more resources to research on development. I understand that it may not be the most profitable industry--but think of the lives we could save. I agree with Caroline that reducing the research gap should be a bigger priority.

    But then again I suppose there is always a flip side. Even if we know what we should do...actually making it happen is whole different thing.

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  15. I think it is important to note that while all 5 of these things seem obvious and almost easy things to be fixed, that changing one of these things, like increasing education, will not necessarily be successful on the large scale without succesfully improving all 5 of these areas. For instance, improving the education for girls could provide huge returns for them and their families and communities, but not without staying safe from diseases and having access to clean water. If girls get the funding to go to school but come down with malaria, AIDS or some diseas from unsanitary water, they will most likely be unable to go to school and will have trouble learning. This would make the resources put to this girl's education to waste.

    All 5 of these things should be made a priority and it is ridiculous that more resources haven't been dedicated towards these issues. I was in a village in the amazon in Manaus, Brazil, this summer and last year, and the villagers were talking to us about many of the issues they face including lack of access to clean water. They have to boil water themselves but often still suffer from diseases from the water and don't have good methods of treatment for the diseases. The government promised them access to cleaner water and also access to electricity (which they currently only get for a few hours a day), but they haven't received any of it yet. I wonder when the government will start to act on their promises.

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  16. It is interesting that this article essentially highlights what we have discussed in class. To me, the most shocking element of the issue is the piece related to disease. When I visited Ghana last spring, I couldn't believe that Ghanaians would catch malaria and suffer considerably from it. Going into the experience, I didn't really consider that acquiring a prescription for malaria pills was a big deal, but this was almost unheard of among Ghanaians. They built immunity to the disease over time, rather than taking medication. Our host brother, for example, was 26 years old and he would still catch malaria periodically throughout any given year. In response to catching the illness, he would basically wait-it-out. Thus, it doesn't seem like getting this disease in-check would take too much, but apparently that is not the case.

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  17. It is obvious that aid improves the lives of people in less developed countries, and this article tells us where we should focus our time and money to positively impact as many people as possible.
    The first type of aid mentioned is improving opportunities for women. Not only does this improve the life of the impacted woman, it also lowers birthrates and adds to the human capital stock.
    Clean water improves health, for obvious reasons, but also improves education. Children can go to school because they are not sick from dirty water.
    Microfinance is an extraordinary way to help the world's poor. The story of the woman and her children could be repeated infinitely with adequate investment in microfinance.
    Eradicating disease greatly improves health. It also improves human capital and foreign investment, increasing the attractiveness of that nations work force. Firms dont want to train workers who will die, as well as live around illness.
    Finally, research has improved the developing world due to its high dependence on agriculture. Agricultural research has made a monumental difference in how much the poor can reap from their small plots of land.

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  18. The article talks about 5 aids: empowering women with education, improving sanitation and environment, microfinance, improving health (by combating diseases), and promoting agricultural research. While I see that there's the equal significance of each aid, after taking this class, I become more interested in and even believe more in the work of economists who do research and experiments to evaluate current ways of eradicating poverty, and to find out new programs htat'd be more efficient than the current ones. Examples would be Duflo and the MIT J-PAL. I hope that professionals will keep up their good work while policy-makers/institutions/MDCs will also listen more to these results rather than spend way too much time on negotiating different interests pertinent to their own countries.

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  19. The article brings together most of the topics we have discussed in class this semester. It expands upon the implications of empowering women - the potential to earn economic bargaining power and independence and to make their children better off (in terms of health, nutrition, and education). The article cites safe water and sanitation as basic needs for improving and then maintaining general health and for eliminating diseases (such as malaria, cholera, dysentery, and typhoid). It ties improvements in health to school attendance. The impacts of two other development intervention areas are mentioned as well - microfinance to empower natural entrepreneurs, and research to develop new technologies and methods for sustaining development.

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  20. The most striking part of this article is that all of these ideas are so basic and inherently simple. This semester of development econ has revealed that policy and aid need not be complex to be effective. The biggest effect comes from the simplest forms of aid, from small loans to vaccines to clean water. Every part of life feeds off of these basic elements, so this type of aid will have a multiplicative effect as it echoes throughout the system. Additionally, the lack of these basics prevents any meaningful impact of policy. The basic necessities are called such for a reason, as they are the driving force behind all elements of human life.

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