Podcast
Questions and Answers
What is meant by chronic poverty?
What is meant by chronic poverty?
Impoverished individuals have access to essential services like healthcare and shelter.
Impoverished individuals have access to essential services like healthcare and shelter.
False
What is a major indicator that a family is considered 'food poor'?
What is a major indicator that a family is considered 'food poor'?
Falling below a specific food security line
A society characterized by information technology is referred to as an ______ society.
A society characterized by information technology is referred to as an ______ society.
Signup and view all the answers
Match the type of society with its characteristic:
Match the type of society with its characteristic:
Signup and view all the answers
Which of the following terms is associated with the idea of not being able to imagine opportunities for improvement?
Which of the following terms is associated with the idea of not being able to imagine opportunities for improvement?
Signup and view all the answers
Absolute poverty is defined as being above the national poverty line.
Absolute poverty is defined as being above the national poverty line.
Signup and view all the answers
What is the monthly income associated with the national poverty line in the Philippines?
What is the monthly income associated with the national poverty line in the Philippines?
Signup and view all the answers
Income inequality is rising due to __________ and global competition.
Income inequality is rising due to __________ and global competition.
Signup and view all the answers
Match the following terms with their definitions:
Match the following terms with their definitions:
Signup and view all the answers
Which of the following is considered a challenge to sustainability?
Which of the following is considered a challenge to sustainability?
Signup and view all the answers
Quality entitlements are necessary for ensuring sustainable development.
Quality entitlements are necessary for ensuring sustainable development.
Signup and view all the answers
What is one primary area where the impoverished are often found?
What is one primary area where the impoverished are often found?
Signup and view all the answers
Which of the following is NOT one of Ostrom's design principles?
Which of the following is NOT one of Ostrom's design principles?
Signup and view all the answers
The Tragedy of the Commons refers to the overuse and depletion of shared resources due to individual self-interest.
The Tragedy of the Commons refers to the overuse and depletion of shared resources due to individual self-interest.
Signup and view all the answers
What does the term 'Green Conscience Phenomenon' refer to?
What does the term 'Green Conscience Phenomenon' refer to?
Signup and view all the answers
The concept of ________ emphasizes the need for equitable distribution of development benefits.
The concept of ________ emphasizes the need for equitable distribution of development benefits.
Signup and view all the answers
What is a significant challenge in achieving sustainability?
What is a significant challenge in achieving sustainability?
Signup and view all the answers
Monitoring is essential to ensure accountability among appropriators of common-pool resources.
Monitoring is essential to ensure accountability among appropriators of common-pool resources.
Signup and view all the answers
What is the relationship between biofuels and food supply?
What is the relationship between biofuels and food supply?
Signup and view all the answers
An example of an efficiency-increasing technology is the transition from ________ bulbs to ________ bulbs.
An example of an efficiency-increasing technology is the transition from ________ bulbs to ________ bulbs.
Signup and view all the answers
Which principle suggests that all stakeholders must have a say in modifying the rules?
Which principle suggests that all stakeholders must have a say in modifying the rules?
Signup and view all the answers
Investing in social security can help combat rapid population growth.
Investing in social security can help combat rapid population growth.
Signup and view all the answers
Name one of Ostrom's design principles that addresses conflict resolution.
Name one of Ostrom's design principles that addresses conflict resolution.
Signup and view all the answers
Match the following terms with their definitions:
Match the following terms with their definitions:
Signup and view all the answers
Ostrom's principle of ________ means monitoring the conditions of common-pool resources.
Ostrom's principle of ________ means monitoring the conditions of common-pool resources.
Signup and view all the answers
What is the main concern expressed by the term 'Overpopulation' regarding common-pool resources?
What is the main concern expressed by the term 'Overpopulation' regarding common-pool resources?
Signup and view all the answers
Which of the following regions has the largest unmet energy needs?
Which of the following regions has the largest unmet energy needs?
Signup and view all the answers
Economic growth is sufficient for significantly reducing extreme poverty.
Economic growth is sufficient for significantly reducing extreme poverty.
Signup and view all the answers
What does MDG stand for?
What does MDG stand for?
Signup and view all the answers
The Gini coefficient measures ___________ within a population.
The Gini coefficient measures ___________ within a population.
Signup and view all the answers
Match the following Millennium Development Goals with their respective focus areas.
Match the following Millennium Development Goals with their respective focus areas.
Signup and view all the answers
What is the term used for the factors that allow certain individuals or groups to access resources while others cannot?
What is the term used for the factors that allow certain individuals or groups to access resources while others cannot?
Signup and view all the answers
What are extractive institutions?
What are extractive institutions?
Signup and view all the answers
High levels of inequality can lead to economic inefficiency.
High levels of inequality can lead to economic inefficiency.
Signup and view all the answers
The practice of favoring close friends, especially in political matters, is known as __________.
The practice of favoring close friends, especially in political matters, is known as __________.
Signup and view all the answers
Which of the following is NOT a form of market failure?
Which of the following is NOT a form of market failure?
Signup and view all the answers
What is Pareto efficiency?
What is Pareto efficiency?
Signup and view all the answers
The phenomenon where individuals make irreversible investments complementing certain institutions is referred to as __________.
The phenomenon where individuals make irreversible investments complementing certain institutions is referred to as __________.
Signup and view all the answers
Match the following megatrends to their impacts on inequality.
Match the following megatrends to their impacts on inequality.
Signup and view all the answers
Urban areas exclusively benefit the rich and do not provide opportunities for poorer populations.
Urban areas exclusively benefit the rich and do not provide opportunities for poorer populations.
Signup and view all the answers
What is the main issue posed by excessive lobbying?
What is the main issue posed by excessive lobbying?
Signup and view all the answers
What is a consequence of a competitive market?
What is a consequence of a competitive market?
Signup and view all the answers
Government intervention is always effective in solving economic problems.
Government intervention is always effective in solving economic problems.
Signup and view all the answers
What is the main purpose of the Foster, Greer, and Thorbecke (FGT) Index?
What is the main purpose of the Foster, Greer, and Thorbecke (FGT) Index?
Signup and view all the answers
The overall value of all goods and services produced within a country's borders in a given year is called ______.
The overall value of all goods and services produced within a country's borders in a given year is called ______.
Signup and view all the answers
Match the following poverty measures with their definitions:
Match the following poverty measures with their definitions:
Signup and view all the answers
What does the concept of 'wicked problems' refer to?
What does the concept of 'wicked problems' refer to?
Signup and view all the answers
Purchasing Power Parity (PPP) provides a more accurate comparison of living standards across countries.
Purchasing Power Parity (PPP) provides a more accurate comparison of living standards across countries.
Signup and view all the answers
What is the role of the Genuine Progress Indicator (GPI)?
What is the role of the Genuine Progress Indicator (GPI)?
Signup and view all the answers
Goods and services provided without profit to all members of a society are called ______.
Goods and services provided without profit to all members of a society are called ______.
Signup and view all the answers
Match the following types of risks with their descriptions:
Match the following types of risks with their descriptions:
Signup and view all the answers
Which of the following is NOT a characteristic of wicked problems?
Which of the following is NOT a characteristic of wicked problems?
Signup and view all the answers
Income is necessary to improve overall well-being.
Income is necessary to improve overall well-being.
Signup and view all the answers
What is meant by the term 'income redistribution'?
What is meant by the term 'income redistribution'?
Signup and view all the answers
The index that combines education, health, and standard of living to measure a country's development is called the ______.
The index that combines education, health, and standard of living to measure a country's development is called the ______.
Signup and view all the answers
Income deprivation often leads to _____ outcomes for individuals.
Income deprivation often leads to _____ outcomes for individuals.
Signup and view all the answers
One of the major aspects of sustainability is managing _____ effectively.
One of the major aspects of sustainability is managing _____ effectively.
Signup and view all the answers
Severe entitlements deprivation indicates a lack of basic _____ needed for a sustainable life.
Severe entitlements deprivation indicates a lack of basic _____ needed for a sustainable life.
Signup and view all the answers
Poverty is often associated with _____ exclusion, which can further hinder opportunities.
Poverty is often associated with _____ exclusion, which can further hinder opportunities.
Signup and view all the answers
Vulnerability can exacerbate the effects of _____, affecting personal and community well-being.
Vulnerability can exacerbate the effects of _____, affecting personal and community well-being.
Signup and view all the answers
Absolute poverty is the state of not having enough _____ to cover basic needs.
Absolute poverty is the state of not having enough _____ to cover basic needs.
Signup and view all the answers
The national poverty line in the Philippines is set at _____ per day.
The national poverty line in the Philippines is set at _____ per day.
Signup and view all the answers
_____ challenges like climate change certainly affect the sustainability in the development sector.
_____ challenges like climate change certainly affect the sustainability in the development sector.
Signup and view all the answers
Impoverished individuals fall below the ______ line.
Impoverished individuals fall below the ______ line.
Signup and view all the answers
A major characteristic of ______ society includes the use of information technology.
A major characteristic of ______ society includes the use of information technology.
Signup and view all the answers
Chronic poverty is also known as ______ poverty.
Chronic poverty is also known as ______ poverty.
Signup and view all the answers
The ______ coefficient measures income inequality within a population.
The ______ coefficient measures income inequality within a population.
Signup and view all the answers
The concept of wellbeing is ______ implying priorities and trade-offs.
The concept of wellbeing is ______ implying priorities and trade-offs.
Signup and view all the answers
Supporting ecosystem services rely on necessary natural processes such as biodiversity, nutrient cycling, and the _____ cycle.
Supporting ecosystem services rely on necessary natural processes such as biodiversity, nutrient cycling, and the _____ cycle.
Signup and view all the answers
People-centered development emphasizes that individuals are the _____ and beneficiaries of development processes.
People-centered development emphasizes that individuals are the _____ and beneficiaries of development processes.
Signup and view all the answers
The _____ of human rights entails the realization of all fundamental freedoms for everyone.
The _____ of human rights entails the realization of all fundamental freedoms for everyone.
Signup and view all the answers
Equity requires a fair distribution of development _____ among all groups.
Equity requires a fair distribution of development _____ among all groups.
Signup and view all the answers
The 'Tragedy of Commons' describes the deterioration of common-pool resources due to _____ desires.
The 'Tragedy of Commons' describes the deterioration of common-pool resources due to _____ desires.
Signup and view all the answers
Ostrom's design principle of clearly defined _____ ensures that people understand their rights to withdraw from resources.
Ostrom's design principle of clearly defined _____ ensures that people understand their rights to withdraw from resources.
Signup and view all the answers
Graduated sanctions are applied to rule violators in order to ensure _____ and accountability.
Graduated sanctions are applied to rule violators in order to ensure _____ and accountability.
Signup and view all the answers
The concept of 'negative production effect' refers to the outcomes where _____ technologies lead to increased production demands.
The concept of 'negative production effect' refers to the outcomes where _____ technologies lead to increased production demands.
Signup and view all the answers
The phrase 'Green Conscience Phenomenon' highlights people's tendency to believe that new clean-energy technologies can be a cure-all for _____.
The phrase 'Green Conscience Phenomenon' highlights people's tendency to believe that new clean-energy technologies can be a cure-all for _____.
Signup and view all the answers
Investing in social security is one approach to combatting rapid _____ growth.
Investing in social security is one approach to combatting rapid _____ growth.
Signup and view all the answers
Monitoring ensures that appropriation of common-pool resources includes _____ and accountability from participants.
Monitoring ensures that appropriation of common-pool resources includes _____ and accountability from participants.
Signup and view all the answers
Nested enterprises create multiple levels for governance of common-pool resources, establishing necessary _____ and balances.
Nested enterprises create multiple levels for governance of common-pool resources, establishing necessary _____ and balances.
Signup and view all the answers
To maintain a sustainable environment, it is essential to acknowledge that resources are _____.
To maintain a sustainable environment, it is essential to acknowledge that resources are _____.
Signup and view all the answers
William Stanley Jevon's paradox indicates that more efficient technologies can lead to an _____ in consumption.
William Stanley Jevon's paradox indicates that more efficient technologies can lead to an _____ in consumption.
Signup and view all the answers
Total energy needs unmet is _____ billion.
Total energy needs unmet is _____ billion.
Signup and view all the answers
The Millennium Development Goal aimed at eradicating extreme poverty is MDG ____.
The Millennium Development Goal aimed at eradicating extreme poverty is MDG ____.
Signup and view all the answers
Economic growth is essential in reducing extreme ______.
Economic growth is essential in reducing extreme ______.
Signup and view all the answers
The term 'vertical inequality' refers to inequality among different ______.
The term 'vertical inequality' refers to inequality among different ______.
Signup and view all the answers
Inequality is measured through Gini coefficients and _____ curves.
Inequality is measured through Gini coefficients and _____ curves.
Signup and view all the answers
High inequality can lead to economic ______.
High inequality can lead to economic ______.
Signup and view all the answers
The practice of favoring close friends in political appointments is referred to as ______.
The practice of favoring close friends in political appointments is referred to as ______.
Signup and view all the answers
Technological innovation can create _____ and losers in the economy.
Technological innovation can create _____ and losers in the economy.
Signup and view all the answers
Urbanization has shifted more people to live in _____ areas.
Urbanization has shifted more people to live in _____ areas.
Signup and view all the answers
Government intervention is often necessary to address market ______.
Government intervention is often necessary to address market ______.
Signup and view all the answers
Non-rivalry and non-exclusive are characteristics of _____ goods.
Non-rivalry and non-exclusive are characteristics of _____ goods.
Signup and view all the answers
The phenomenon of conditions that prevent entry into markets is often termed _____ barriers.
The phenomenon of conditions that prevent entry into markets is often termed _____ barriers.
Signup and view all the answers
The term 'brain drain' refers to the emigration of skilled ______ to other countries.
The term 'brain drain' refers to the emigration of skilled ______ to other countries.
Signup and view all the answers
The idea of 'veil of ignorance' suggests individuals should make decisions without knowing their ______.
The idea of 'veil of ignorance' suggests individuals should make decisions without knowing their ______.
Signup and view all the answers
A competitive market can lead to __________.
A competitive market can lead to __________.
Signup and view all the answers
The __________ of commons refers to a situation where many people overconsume shared resources.
The __________ of commons refers to a situation where many people overconsume shared resources.
Signup and view all the answers
Government intervention is politically __________ and may not always be effective.
Government intervention is politically __________ and may not always be effective.
Signup and view all the answers
The __________ of poverty measures the average distance of the poor from the poverty line.
The __________ of poverty measures the average distance of the poor from the poverty line.
Signup and view all the answers
__________ problems are characterized by their complexity and conflicting goals.
__________ problems are characterized by their complexity and conflicting goals.
Signup and view all the answers
The __________ index measures national socioeconomic development based on health, education, and income.
The __________ index measures national socioeconomic development based on health, education, and income.
Signup and view all the answers
Purchasing Power Parity is used to compare __________ across countries.
Purchasing Power Parity is used to compare __________ across countries.
Signup and view all the answers
The Genuine Progress Indicator accounts for unpaid work and the cost of __________.
The Genuine Progress Indicator accounts for unpaid work and the cost of __________.
Signup and view all the answers
Socially complex issues require extreme __________ for effective coordination among stakeholders.
Socially complex issues require extreme __________ for effective coordination among stakeholders.
Signup and view all the answers
The __________ of poverty highlights the degree of income inequality among the poor.
The __________ of poverty highlights the degree of income inequality among the poor.
Signup and view all the answers
Government policies can prevent the overuse of common resources by __________ violators.
Government policies can prevent the overuse of common resources by __________ violators.
Signup and view all the answers
Sustainability concerns __________ equity, ensuring future generations are not worse off.
Sustainability concerns __________ equity, ensuring future generations are not worse off.
Signup and view all the answers
Income is necessary for improving well-being and often correlates with __________ opportunities.
Income is necessary for improving well-being and often correlates with __________ opportunities.
Signup and view all the answers
The __________ is a calculation of income that adjusts based on a peg price set at a common year.
The __________ is a calculation of income that adjusts based on a peg price set at a common year.
Signup and view all the answers
Health, education, and __________ are key dimensions in assessing basic needs.
Health, education, and __________ are key dimensions in assessing basic needs.
Signup and view all the answers
Study Notes
What Is Poverty?
- Poverty is the inability to meet the minimum levels of income, food, clothing, health care, shelter, and other essentials.
- People below the poverty line are considered "impoverished".
Poverty in the Philippines
- 10.9% of families (3 million families) are considered income poor.
- 15.5% of individuals (17.54 million people) are considered income poor.
- 2.7% of families (740,000 families) are considered food poor.
- 4.3% of individuals (4.84 million people) are considered food poor.
- The national poverty line in the Philippines is 33,296 pesos annually.
Poverty in the Philippines: Subsistence Breakdown
- The national poverty line (subsistence): 22,995 pesos annually
- Monthly subsistence: 1,916.25 pesos
- Weekly subsistence: 442.21 pesos
- Daily subsistence: 63.0 pesos
Types of Poverty
- Chronic Poverty: Poverty that persists over long periods. This involves situations where there is no movement from poor to non-poor.
- Persistent Poverty: A state of poverty that lasts for a relatively long time due to factors beyond the control of the individual.
- Situational Poverty: A state of poverty caused by sudden or temporary shocks, such as natural disasters, job loss, or illness.
Causes of Poverty
- Income Deprivation: Lack of sufficient income to meet basic needs.
- Severe Entitlements Deprivation: Inability to access essential services, such as healthcare, education, and sanitation.
- Capability Failure: Lack of skills, knowledge, or opportunities to improve one's situation.
- Social Exclusion: Marginalization from society due to factors like discrimination, lack of access to education and employment, or social stigma.
- Vulnerability: Susceptibility to shocks, such as natural disasters, economic downturns, or illness, that can push people into poverty.
- Poor Livelihood and Life Outcomes: Low-quality employment, poor health, and lack of access to opportunities that contribute to staying in impoverished conditions.
- Being Left Behind: Failing to benefit from economic growth and development.
Dimensions of Poverty
- Economic: Poverty is often measured by income and wealth.
- Social: Poverty can also be measured by access to social services, such as healthcare, education, and sanitation.
- Political: Poverty can also be influenced by political factors, such as corruption, lack of transparency, and lack of voice in decision-making.
- Environmental: Poverty can also be related to environmental factors, such as climate change, natural disasters, and access to clean water and sanitation.
The History of Development
- Development can be seen as the opposite of poverty.
- Development includes the enhancement of human well-being, which involves a complex mix of economic, social, political, and environmental factors.
- There have been several stages or phases of development, including:
- Hunting societies
- Agrarian societies
- Industrial societies
- Information societies
- Super smart societies
Overcoming Poverty in the Philippines
- Multi-dimensional Poverty: Understanding poverty is a complex issue that needs a multidimensional approach including economic, social, political, and environmental factors.
- Addressing Vulnerability: The Philippines needs to focus on vulnerabilities and challenges, including the reality of climate change, globalization, and global competition
- Political Stability: Political stability, good governance, and cooperation from all sectors and social classes.
- Responding to Challenges: The need for policies that address the impact of climate change, hunger, malnutrition, income inequality, and rapid urbanization.
Energy Needs Unmet
-
1.1 Billion people lack access to electricity.
- 534 Million reside in Sub-Saharan Africa.
- 389 Million live in South Asia.
Financing Sustainable Development
-
Millennium Development Goals (MDG)
- Eradicate extreme poverty and hunger
- Achieve universal primary education
- Promote gender equality and empower women
- Reduce child mortality
- Improve mental health
- Combat HIV/AIDS, malaria, and other diseases
- Ensure environmental sustainability
- Develop partnerships for development
-
Most successful MDGs:
- MDG 1: Eradicate extreme poverty and hunger
- MDG 3a: Promote gender equality and empower women
- MDG 7: Ensure environmental sustainability
- Economic growth is crucial for poverty reduction, however, it might not sufficiently benefit those farthest from the poverty line.
Inequality
-
Inequity vs Inequality
- Inequity: focuses on unequal opportunities, ex-ante event (before the outcome), and relative probability of success.
-
Inequality: examines the current distribution of outcomes, ex-post event (after the outcome), measured by Gini coefficients and Lorenz curves.
- Gini coefficient: ranges from 0 to 1, with 0 representing perfect equality and 1 representing perfect inequality.
-
Key Dimensions of Inequality
- Space: income, capability, access to resources.
- Time: measuring over time periods offers a comprehensive understanding of inequality and its consequences.
-
Types of Inequality
- Vertical Inequality: among individuals or households.
- Horizontal Inequality: within a group.
-
Inequality as a Problem
-
Economic Inefficiency:
- Diminishes credit access and loan eligibility for a significant portion of the population due to high inequality.
- Contributes to debt and poverty traps.
- Limits adaptability to unexpected economic shocks.
- Drives reliance on informal sources with potentially predatory interest rates and collateral requirements.
-
Undermines Social Stability:
- Strengthens the political and economic power of the wealthy, contributing to rent-seeking behaviors.
- Rent-seeking distorts policy decisions and leads to resource misallocation.
- Reinforces inefficient institutions due to individuals' investments being tied to those institutions.
-
Economic Inefficiency:
Causes of Inequality
-
Weak Institutions
- Insecure property rights, susceptibility to bribery, and inefficient legal systems hinder disputes and contract resolution.
- Political instability creates uncertainty.
- Corrupt markets lead to market failures.
-
Perpetuation of Extractive Institutions:
- Existing elite groups may resist institutional reform due to benefits gained from the status quo.
- These institutions hinder economic and social progress.
-
Technological Innovation
- Creates winners and losers, impacting job creation, destruction, and transformation.
- Highly skilled workers often benefit most from advancements like the Fourth Industrial Revolution (4IR).
- Digital divides and unequal access to technology exacerbate inequality.
-
Climate Change
- Adversely affects economic growth in tropical regions due to unpredictable weather patterns and environmental shocks.
- Marginalized communities, especially in rural areas, are disproportionately exposed to climate change impacts.
-
Urbanization
- While urban areas drive economic growth, innovation, and employment, weak institutions can marginalize individuals.
- Issues include: unregulated land and housing markets, poor urban planning, and congestion.
-
International Migration
- Positives: remittances, knowledge transfer, FDI, and trade flows.
- Negatives: brain drain, economic growth hampering in countries losing skilled professionals, subsidizing wealthier countries.
Megatrends in Inequality
- Global Migration: large-scale movements of people across borders due to economic opportunities, education, family reunification, and conflict or natural disasters.
- Zemblanity: the likelihood of unexpected, negative discoveries occurring due to intentional actions.
Market Failure
-
Welfare Economics: focuses on Pareto efficiency.
- Pareto Efficiency: improving the well-being of some individuals without negatively impacting others.
- Limitations: highly individualistic, ignores relative well-being, focuses on efficiency over inequality.
-
6 Forms of Market Failure
-
Competition Failure:
- Monopoly: single firm controls the market.
- Oligopoly: few firms control the market.
-
Reasons for market failure:
- Cost advantages leading to competitive dominance.
- Natural monopolies with more efficient single-firm production.
- Barriers to entry, such as high transportation costs.
- Imperfect information, including false scarcity and strategic control.
- Public Goods: non-rivalrous and non-exclusive goods or services, often underprovided by the private sector.
-
Incomplete Markets: goods or services too expensive to produce but in demand by consumers.
- Examples: insurance, loans, R&D funding.
-
Externalities: unintended consequences of production or consumption, harming or benefiting third parties.
- Government intervention: incentivizing positive externalities, penalizing negative externalities, and subsidizing abatement and lower production of negative externalities.
- Information Failure/Information Asymmetry: missing or withheld information leading to market manipulation.
-
Common Resources: shared natural resources subject to overuse and depletion.
- Examples: air, land, water, wildlife.
- Challenges: infinite selfish desires over finite resources.
-
Competition Failure:
Government Intervention in Market Failures
-
Government intervention: to address market failures, promoting efficiency and equity.
-
Competition Failure:
- Encourage competition
- Provide financial support
- Set price ceilings and floors
- Promote information availability
- Manage intellectual property
- Implement regulations to prevent monopolies
-
Public Goods:
- Invest in public goods
- Facilitate private sector participation
- Address free-rider issues
-
Externalities:
- Set standards
- Enact laws and regulations
-
Incomplete Markets:
- Bear the costs of certain services
- Facilitate coordination between markets
-
Transaction Costs:
- Reduce costs and risks associated with innovation
- Develop third-party arbitration bodies
-
Information Asymmetry:
- Increase transparency and information availability
- Protect consumer privacy
-
Common Resources:
- Establish regulations and quotas
- Implement sustainable management practices
-
Competition Failure:
Unemployment, Inflation, & Disequilibrium
-
Macroeconomic Disturbances: market failures during events such as the COVID-19 pandemic.
- Incomplete Markets: lack of a vaccine market for widespread access.
- Public Goods: private learning materials became public necessities during lockdowns and school closures.
- Externalities: vaccine hesitancy and mask aversion, which negatively impacted public health.
- Information Asymmetry: targeted scams and misinformation.
- Incomplete Markets: reliance on online selling platforms and limited supply chain options.
Pareto Efficiency
- A Pareto efficient economy says nothing about income distribution.
- A competitive market can lead to inequality.
Tragedy of the Commons
- A situation where many people take more of their share in a pool of common resources.
- Often leads to overuse.
- Often unstable and constantly evolves due to society's whims.
- Usually has no clear solutions.
- Socially complex.
- Never at the responsibility of any one group.
- Necessitates changing behaviors.
- Characterized by chronic policy failure.
- Is preventable with oversight or regulation.
- The government can provide or require merit goods.
Wicked Problems
- Difficult to clearly define.
- Varying definitions.
- Have many interdependencies and are often multi-casual.
- Attempts to solve them can lead to unforeseen consequences.
- Have the possibility of future harm.
- Often unstable.
- Usually have no clear solutions.
- Socially complex.
- Never at the responsibility of any one group.
- Necessitates changing behaviors.
- Characterized by chronic policy failure.
Safeguarding the Future
- A healthy planet
- Strong institutions
- Health, social protection
- Education, work
- Preparedness
Global Public Goods and the Global Commons
- Public goods
- Global Health
- Information
- Global economy
- A healthy planet
- Science
- Peace
- Digital
- Commons
- High seas
- Atmosphere
- Antarctica
- Outer space
Ways Forward
- Renewed social contract
- Individual
- Civil society
- State/institutions
- Private sector
- Foundations
- Trust
- Inclusion, protection, participation
- Measuring and valuing what matters to people and the planet
- Solidarity between generations
- Voice and participation
- Quality education
- Sustainable jobs
- Long-term thinking
- Represent future generations
Monetary Measures of Development
-
Poverty
- Headcount ratio (HCR)
- Percentage of people in a population below a poverty line
- a=0
- Depth of poverty/ Poverty Gap Ratio
- The average distance of the poor from the poverty line
- a=1
- Severity of poverty
- The degree of income inequality among the poor
- a=2
- Foster, Greer, and Thorbecke (FGT) Index
- Headcount ratio (HCR)
-
Global economy measure
- GNI per capita PPP
-
Income
- Income is necessary to improve well-being.
- A growing economy often equates to increased employment opportunities.
- Without sufficient economic growth, raising the well-being of the poor becomes socially costly.
- Requires taxation and redistribution.
- Redistributive growth
- A preferred labor-intensive and agricultural growth.
-
Growth Rates
- Consumer Price Index (CPI)
- Sometimes called the GDP deflator
- A calculated value that allows GDP to adjust to inflation
- A base year is often chosen that equates prices to 100 or 1
- Real GDP / GDPPc
- Income across countries
- GDPPc$ = GDPPc local currency/nominal exchange rate
- Purchasing Power Parity
- Calculation of GNI using a common set of international prices for all goods and services to provide more accurate comparisons of living standards.
- PPP-adjusted GDPPc$ = GDPPc local currency/PPP exchange rate.
- Consumer Price Index (CPI)
-
GDP and GNP
- Gross Domestic Product (GDP)
- Aggregate value-added by all firms in a country.
- Gross National Product/Income (GNP/GNI)
- GDP + net factor income from abroad
- Repatriated profits
- Remmitances by migrants
- Computing GDP
- C + I + G = (X-M)
- C - consumption
- I - investments
- G - Government expenditure
- X - exports
- M- imports
- GDP/GNIPPc
- GDP or GNI divided by the population of a country.
- Growth in GDPPc/GNIPc is a good measure of average income progress over time.
- Gross Domestic Product (GDP)
-
Nominal GDP
- Raw GDP value
- Based on current prices.
-
Real GDP
- GDP value taking inflation into account.
- Based on a peg price set at a common year.
Non-Monetary Measures of Development and Measuring the SDGs
-
Vulnerability
- For everyone: the probability of falling into poverty as a consequence of exposure to shocks.
- May increase poverty incidence.
- Especially for the poor: The probability that future outcomes are lower than current outcomes because of shocks.
- May increase depth of poverty.
- Lower future income than current income
- Decline in food consumption compared to current.
-
Risks
- The poor are more risk-averse.
- A decline in income or food consumption for the poor has a higher impact than the same happening to the non-poor.
- Sources of risk:
- Natural disasters
- Health shocks
- Social disasters
- Economic shocks
- Political shocks
- Environmental shocks
- Covariate risks - affecting many people.
- Idiosyncratic risks - affect an individual or particular households.
-
Risk of irreversibility - shocks could lead to:
- Chronic poverty - long-term poverty
- Persistent or situational poverty - insistent movement from poor to non-poor; poverty caused by sudden or temporary shocks.
-
Lessening Vulnerability
- Risk reduction (Prevention) - reducing the probability and severity of shocks
- Pursuing education, vaccination, investing in irrigation, climate-adaptive plant varieties
- Risk management (Mitigation) - reducing the impact of shocks
- Self - choosing low-risk activities, savings, income, diversification
- Mutual - investing in relationships and social capital
- Formal - crop insurance, fire insurance, life insurance
- Risk coping - relieving the impact of experiencing shocks
- borrowing, selling assets, migration, child labor, consumption or expenditure postponement.
- Risk reduction (Prevention) - reducing the probability and severity of shocks
-
Basic Needs or Entitlements
- Commodities or services over which a person can exercise ownership or command.
- Necessary aspects of life for human development.
- Broad agreement on basic needs.
- Multi-dimensional.
- Public goods.
-
Dimensions of Basic Needs
- Health - life expectancy, infant mortality, maternal mortality, access to and quality of health services.
- Education - enrollment rates, dropout rate, repetition, literacy rate, availability of and distance to schools, class size.
- Nutrition - malnutrition and hunger, height-for-age, weight-for-age.
-
Indicators of basic needs
- Z-scores for child health, Global burden of disease, malnutrition.
-
Human Development Index (HDI)
- An index measuring national socioeconomic development, based on combining measures of education, health, and PPP-GNIPPc.
-
Multidimensional Poverty Index
- A need for the participation of the most industrialized countries.
-
Quality of Life
- To capture other important aspects of development.
- Two main schools of thought:
- QoL indicators by William Easterly
- Freedom and Capabilities by Amartya Sen
-
William Easterly
- Describes 81 QoL indicators.
- Individual rights and democracy.
- Political stability and peace.
- Absence of "bads".
-
Amartya Sen
- Development is a process of expanding freedom.
- Capabilities - choices a person makes among "functionings" that they can achieve, and the freedom to exercise such choices.
- Functioning - what people can be or do.
- Freedom - Exercise of choice.
- Capabilities is the freedom of opportunities.
-
Sen’s central human capabilities
- Freedom from:
- Early death
- Morbidity
- Hunger and malnourishment
- Engage in productive activity
- Fear
- Ignorance and illiteracy
- Participate in the social and political life of the community
- Fell loved
- Freedom from:
-
Sustainability
- The concern with intergenerational equity: the well-being of future generations should not be inferior to that of the current generation as a consequence of the current generation's behavior toward the use of natural resources and the environment.
-
Aspects of sustainability
- Climate change and carbon emissions.
- Transmission of the stocks of assets across generations (Natural, physical, human, social)
- Accumulation of public debt.
-
Challenges of sustainability
- Thinking about the future
- How many generations.
- Social scope
- For whose wellbeing
- 169 targets.
- Thinking about the future
-
Each target has indicators
- 231 unique indicators
- 248 listed as total
-
Five criteria in selecting indicators
- Relevance and applicability to a broad range of county contexts.
- Statistical adequacy - represents valid and reliable measures.
- Timeliness - current and published on a timely schedule.
- Coverage - available for at least 80% of UN member states with a population over one million.
- Distance to targets must be measurable to define optimal performance and opportunities.
-
Challenges to measuring the SDGs
- Indicators can still be vague.
- Indicators update themselves.
- Some targets still don't have completely agreed-upon indicators.
- Data availability is uneven across the world.
- Index ranking and score must not be compared with previous results outright.
- New reports have portions that recalculate rankings and scores based on updated measure.
-
Creating the indexes and scoring
- Establish performance thresholds and censor extreme values from the distribution of each indicator.
- Rescale data to ensure comparability across indicators.
- Aggregate the indicators within and across SDGs.
-
Establishing thresholds
- Setting upper bound
- Lower bound set at the 2.5th percentile of the distribution.
-
International Spillover Index
- Tracks the impacts of a given country's actions on others.
- Environmental and social impacts embodied into trade.
- Economy and Finance.
- UN-based multilateralism, peace, and security.
Economic Sustainability
-
Economic stability
- Whether an economy has been growing sustainably for some time or has been stagnant seems to make a very big difference for subsequent development.
-
The Big Push Model
- Concerted, economy-wide, and typically public policy-led effort to initiate/accelerate economic development across a broad spectrum of new industries and skills.
- Addresses coordination problems.
- Incentivization
- Investing
-
Limitations of the Big Push model
- Expensive - massive investment
- Insufficient information on where to invest.
- Insufficient information on final equilibrium.
- The government may prevent coordination - corruption.
-
The Doughnut Economic Model
- Sustainable economic growth
- Kate Raworth
- The aim is to meet the needs of all people within the means of the living planet.
- Center Ring (Social Foundation) - depicts the proportion of people that lack access to life's essentials (Healthcare, education, food, water, etc.)
- Outside Ring (Ecological ceiling) - planetary boundaries that life depends on and must not be overshot.
-
The safe and just space for humanity - The area between the ecological ceiling and the social foundation.
- A dynamic balance is met wherein our social needs can be met without overburdening the planet.
- Regenerative Economy - our material and energy used work within cycles of the living world.
-
Distributive Economy - redistributing wealth creation.
- Sources of wealth creation - Health and Education.
-
Coordination Problem
- Complementarities - an action that increases incentives for other agents to take similar actions.
- The more I do/use something, the easier/cheaper it is for others to do the same.
- Not always necessarily a good thing.
- Can lead to status quo bias - a preference to maintain the current state of affairs.
- Coordination failure - Inability of agents to coordinate their behavior (choices) leads to an outcome (equilibrium) that leaves all agents worse off than in an alternative situation that is also an equilibrium.
- Possible for agents to be fully aware of a better alternative.
- Individually suboptimal to deviate from the current equilibrium.
- Complementarities - an action that increases incentives for other agents to take similar actions.
-
Applications to development
- Complementarities may lead to coordination failure
- Coordinated switch to a new equilibrium is very hard to do.
- Complementarities → Coordination failure → An economy is in a "bad" equilibrium.
Social Sustainability
-
Failed promise of development
- Development through capitalism did not lead to better well-being for all.
- For whom is development for?
- There is a need to learn about the cries, needs, and aspirations of the poor and the vulnerable.
-
Participatory Development
- Necessity of the people's participation in the development process and in defining development goals.
- Significantly important factors for success.
-
Exclusion to Protection to Risk Management
- Historically, the world has prioritized hardware and software inventions.
- Social protection was a third pillar of interventions that was broadly understood as public measures to provide income security to the population.
- Never at the center of development discussions.
- Broadly understood as public measures to provide income security to the population.
- However, the last few decades of poverty has shown that:
- Poverty is not a static state (chronic, persistent).
- Poverty has long-term consequences.
- Social security and other safety nets are difficult to establish during deep crises when experiencing chronic or persistent poverty.
- Various risks and complexities are not more transnational and global, or universally affecting.
- Important for when informal and market-based strategies are non-existent, breakdown, or are dysfunctional.
-
Ideal
- Prevention - Informal and Public
- Mitigation - Informal and Market-based
- Coping - Public
-
Actual
- Prevention – Informal
- Mitigation - Informal
- Coping - Informal and Public
-
Human Rights Based Approach
- Amartya Sen’s perspective of human rights
- Primarily ethical demands
- Underlying principles of freedoms
- Often discussed in a legal context, but constitutively ethical.
- Some rights are best protected by "mere" social acceptance and legal protections may come after.
- Amartya Sen’s perspective of human rights
-
Significance of Human Rights
- Enables freedoms that demonstrate social importance and social inalienability.
- Realization of rights has sense of accountability by persons.
- Rights holders- claim and exercise those rights.
- Duty bearers - realizing rights.
- Human rights are our obligation to everyone - respect, protect, and fulfill it.
- Empowerment - critical to combat poverty.
-
Rights PESCC
- Civil
- Life, liberty, and personal security.
- Equality before the law.
- Protection from arbitrary arrest.
- Religious freedom.
- Due process of the law.
- etc.
- Political
- Free speech and expression.
- Assembly and association.
- Vote and political participation.
- Economic
- Work and fair remuneration.
- Form trade unions and free associations.
- Social security, insurance.
- Civil
-
Social
- Family
- Education
- Health and well-being
- Leisure time
- The widest possible protection and assistance for the family
-
Cultural
- Benefits of culture
- Indigenous land, rituals, and shared cultural practices.
- Speak one’s own language and mother tongue in education.
- Benefits of culture
-
Development progress is challenged to sustain
- What needs to be done now
- What needs to be sustained in the future
-
Developing countries pose more grave challenges
- Cost and cost-effectiveness concerns
- Disproportionately affected by all forms of risks
- Compounding on one another
-
Risk Management is necessary to accelerate and sustain development
- Risk Reduction (Prevention) - reducing the probability and severity of shocks.
- Rish Management (Mitigation) - reducing the impact of shocks
- Self - choosing low-risk activities, savings, income, diversification.
- Mutual - investing in relationships and social capital.
- Formal - acquiring crop insurance, fire insurance, life insurance.
- Risk coping - relieving the impact of experiencing shocks.
- Borrowing, selling assets, migration, child labor, consumption or expenditure postponement.
-
3 risk management arrangements
- Informal
- Social networks or personal arrangements
- Sidesteps information and coordination problems.
- Market-based
- Use of market-baed institutions (money, banks, insurance companies, etc)
- Subject to market forces.
- Public
- Fewer and have limited coverage in developing countries.
- Informal
- Non-discrimination - Espouses no distinction between race, sex, gender, language, or religion.
- Self-determination - Integrates self-determination on sovereignty over natural wealth and resources.
Environmental Sustainability
-
Ecosystem Services
- Benefits people obtain from ecosystems.
- Categories
- Provisioning - material benefits we get from the environment such as food, water, fiber, wood, and fuel.
- Regulating - Benefits from regulation such as air quality, soil fertility, flood control, and crop pollination.
- Cultural - Non-material benefits we get from the environment such as recreation, tourism, spiritual expression, aesthetic appeal, etc.
Poverty and Development
- The traditional stages of development are marked by evolution from hunting to information society.
- Development is about enhancing human well-being and its multidimensional, including income, entitlements, capability freedom, social inclusion, managed risks, and sustainability.
- Poverty is the opposite of development, marked by the depravity of human well-being and limited imagination. It involves:
- Lack of sufficient income, food, clothing, health care, and shelter
- Deprivation of entitlements and capabilities
- Social exclusion and vulnerability
- Poor quality of life and being left behind
- Poverty can be categorized as:
- Income Poor: 10.9% of families and 15.5% of individuals are income poor.
- Food Poor: 2.7% of families and 4.3% of individuals are food poor.
- Chronic Poverty: Long-term poverty, which can be persistent or situational.
- Poverty is deeply rooted in history and systems, stemming from factors like:
- Income deprivation
- Entitlement deprivation
- Capability failure
- Social exclusion
- Vulnerability
- Poverty is a multidimensional issue encompassing economic, social, political, and environmental aspects.
- The Philippine National Poverty Line is set at 33,296 Philippine pesos, with monthly, weekly, and daily equivalents calculated.
Subsistence Breakdown
- The national subsistence poverty line in the Philippines is 22,995 Philippine pesos, with monthly, weekly, and daily equivalents outlined.
Overcoming Poverty
- The impoverished face vulnerabilities due to climate change, globalization, and global competition.
- Political stability, good governance, and cooperation among different social classes are crucial for overcoming poverty.
- Challenges to sustainability include climate change, hunger and malnutrition, income inequality, and rapid urbanization.
Energy Needs Unmet
- 1.1 Billion people lack access to energy worldwide
- 534 Million: Sub-Saharan Africa
- 389 Million: South Asia
Millennium Development Goals (MDGs)
- Eradicate extreme poverty and hunger
- Achieve universal primary education
- Promote gender equality and empower women
- Reduce child mortality
- Improve mental health
- Combat HIV/AIDS, malaria, and other diseases
- Ensure environmental sustainability
- Develop partnerships for development
MDG Success
- Most success achieved with the first, third a, and seventh goals
- Economic growth is effective in reducing extreme poverty
- Economic growth is not enough to counter poverty, especially for those further away from the poverty line
M1.2 Inequality
- Inequity: Equality of opportunity, prior to outcomes
- Inequality: Variance in outcomes, measured by Gini coefficients (0-1) and Lorenz curves (perfect equality is closer to 0, perfect inequality is closer to 1).
- Inequality can be measured among individuals within a society, amongst different groups: age, gender, race/ethnicity, religion, etc.
- Horizontal inequality: inequality within a group
- Vertical Inequality: inequality amongst different groups
- Dimensions of inequality: Income, Capability, Access to Resources
- Timeframe for inequality: Measuring over time allows for understanding the long-term implications of inequality
Inequality as a Problem
- Economic inefficiency: Higher inequality leads to less people qualifying for loans, creating debt traps and reliance on informal lenders with high interest rates
- Undermines social stability: High inequality concentrates power with wealthy, leading to rent-seeking behavior (distortion of policy decisions and misallocation of resources), which undermines institutions.
- Path dependence: Past decisions and events, like colonization and extractive states, lock countries into continuing with existing institutions even if they are inefficient.
Megatrends and Inequality
- Technological Innovation: While it creates winners (highly skilled workers) and losers (those without access), it can create new job opportunities.
- Climate Change: Rising temperatures have adversely affected economic growth in tropical countries, with marginalized populations disproportionately affected by climate change.
- International Migration: Mass migration, while offering remittance and knowledge sharing, leads to shortages of key professionals in sending countries (brain drain).
M1.3 Market Failure
- Pareto efficiency: A state where any change would make some individuals worse off without making anyone else better off.
- Market failure: Situations where the free market does not achieve Pareto efficiency.
-
Government intervention is needed to address market failure by:
- Lowering setup costs
- Providing support for firms in the same market
- Setting price ceilings and floors
- Making information available and transparent
- Instituting regulation
Forms of Market Failure
- Competition failure: When the free market is not competitive (monopoly, oligopoly, natural monopoly), the market is less efficient;
- Public goods: Non-rivalrous and non-exclusive goods that private firms are not incentivized to produce.
- Incomplete markets: Markets where goods and services are too expensive to produce despite demand: such as insurance, loans, and R&D
-
Externalities: Unintended harm or benefit to others as a result of production or consumption of goods.
- Government intervention can be used to incentivize positive externalities and penalize negative externalities.
- Transaction costs: High costs involved in production and offering goods, particularly around innovation.
- Information asymmetry: Information is key to efficient markets. When participants have hidden knowledge or withhold information, markets can be exploited and suffer from inefficient outcomes.
- Common pool resources: Resources shared by a population, such as clean air, land, and wildlife, suffer from overuse because of a lack of individual incentives to protect them.
- Government intervention is needed to address these problems.
Unemployment, Inflation, and Disequilibrium
- Macroeconomic disturbances: Events that create imbalances in the economy such as pandemics.
Market Failure During COVID
- Incomplete markets: Lack of a market for vaccines.
- Public goods: Free access to public learning materials.
- Negative externality: Vaccine hesitancy and mask avoidance behavior.
- Incomplete markets: Online selling platforms.
- Information asymmetry: Targeted scamming.
Pareto Efficiency
- Pareto efficiency in an economy does not inform income distribution.
- Competitive markets can lead to income inequality.
- Tragedy of the Commons: Individuals take more than their fair share of a common resource, leading to depletion.
Government Intervention
- Government intervention in the economy is often politically charged.
- Intervention is not always beneficial, especially in the long run.
- Governments should prioritize public goods provision.
- Government intervention can be imperfect and uncompetitive.
- Governments may not prioritize efficiency in certain services.
Wicked Problems
- Wicked problems lack clear definitions and are often multi-causal.
- They have conflicting goals and various interdependencies.
- Attempts to solve wicked problems can lead to unforeseen consequences.
- There is a possibility of future harm associated with wicked problems.
Characteristics of Wicked Problems
- Difficult to define: They have varying definitions and interpretations.
- Interdependent: They are often intertwined with other problems, making them complex.
- Multi-causal: They have various contributing factors, making it hard to pinpoint one cause.
- Unpredictable consequences: Solutions can sometimes cause unexpected problems.
- Future harm: They often pose a long-term threat to society and the environment.
Safeguarding the Future
- Key areas to safeguard the future include:
- A healthy planet.
- Strong institutions.
- Health and social protection.
- Education and work.
- Preparedness for future challenges.
Global Public Goods & Commons
-
Global public goods: Benefits that everyone enjoys, but no one owns or controls.
- Examples: Global health, information, global economy, a healthy planet, science, peace, digital networks.
-
Global commons: Shared natural resources that no one owns or controls.
- Examples: High seas, atmosphere, Antarctica, outer space.
Moving Forward
-
Renewed social contract: Requires collective action from individuals, civil society, state institutions, and the private sector.
- Foundations for the renewed social contract:
- Trust.
- Inclusion, protection, and participation.
- Measuring and valuing what matters to people and the planet.
- Foundations for the renewed social contract:
-
Solidarity between generations: Ensuring future generations have opportunities and a healthy planet.
- Requires:
- Voice and participation for future generations.
- Quality education.
- Sustainable jobs.
- Long-term thinking.
- Representation for future generations.
- Requires:
Monetary Measures of Development
-
Gross Domestic Product (GDP): The total value of goods and services produced within a country's borders.
-
Computing GDP: C + I + G + (X - M)
- C: Consumption
- I: Investments
- G: Government Expenditure
- X: Exports
- M: Imports
-
Computing GDP: C + I + G + (X - M)
-
Gross National Product/Income (GNP/GNI): GDP plus net factor income from abroad.
- Includes repatriated profits and remittances by migrants.
-
GDP/GNIPPc: GDP or GNI divided by the population of a country, reflecting average income.
- Growth in GDPPc/GNIPc is a good indicator of average income progress over time.
- Nominal GDP: Raw GDP value based on current prices.
- Real GDP: GDP value adjusted for inflation, based on a chosen base year.
Non-Monetary Measures of Development
- Human Development Index (HDI): Measures national socioeconomic development based on education, health, and PPP-GNIPPc.
- Multidimensional Poverty Index (MPI): Measures poverty based on multiple factors like health, education, and living standards.
Vulnerability
- Probability of falling into poverty due to shocks (natural disasters, health emergencies, economic crises, etc.).
-
Probability of future outcomes being lower than current outcomes due to shocks, leading to:
- Increased poverty incidence.
- Increased depth of poverty.
- Lower future income than current income.
- Decline in food consumption compared to current levels.
Risks
- The poor are more risk-averse: Negative impacts of income or food consumption decline are greater for the poor.
- Sources of risk: Natural disasters, health shocks, social disasters, economic shocks, political shocks, environmental shocks.
- Covariate risks: Affect many people simultaneously.
- Idiosyncratic risks: Affect individuals or households specifically.
- Risk of irreversibility: Shocks can lead to chronic poverty or persistent poverty.
Basic Needs
- Commodities or services over which a person can exercise ownership or command.
- Necessary aspects of life for human development.
- Multi-dimensional: Encompass health, education, nutrition, and other essential components.
- Public goods: Benefits society collectively.
Dimensions of Basic Needs
- Health: Life expectancy, infant mortality, maternal mortality, access to and quality of health services.
- Education: Enrollment rates, dropout rates, repetition rates, literacy rates, availability and distance to schools, class size.
- Nutrition: Malnutrition and hunger, height-for-age, weight-for-age.
Indicators of Basic Needs
- Z-scores for child health, Global Burden of Disease, malnutrition indicators.
Quality of Life
- Measures aspects of development beyond monetary indicators.
- Two main schools of thought:
- William Easterly: Focuses on 81 quality of life indicators, including individual rights, political stability, peace, absence of "bads", and more.
-
Amartya Sen: Emphasizes freedom and capabilities.
- Capabilities: Choices people make among "functionings" they can achieve, and the freedom to exercise those choices.
- Functioning: What people can be or do.
- Freedom: Exercise of choice.
- Capabilities represent the freedom of opportunities.
Sen's Central Human Capabilities
- Freedom from:
- Early death.
- Morbidity.
- Hunger and malnutrition.
- Ability to:
- Engage in productive activity.
- Live free from fear.
- Avoid ignorance and illiteracy.
- Participate in social and political life.
- Feel loved.
Sustainability
- Intergenerational equity: Ensuring future generations have a standard of living equal to or better than the current generation.
-
Aspects of Sustainability:
- Climate change and carbon emissions.
- Transmission of assets across generations (natural, physical, human, social capital).
- Accumulation of public debt.
Challenges of Sustainability
- Thinking about the future: How many generations should we consider?
- Social scope: Who benefits from sustainability measures?
- Measurement: Establishing accurate and comprehensive indicators for sustainability is challenging.
SDGs & Measuring Development
- Goals → Targets → Indicators: Each Sustainable Development Goal (SDG) has targets, and each target has several indicators.
-
Setting bounds for targets:
- Upper bound is set at the 97.5th percentile of the distribution.
- Lower bound is set at the 2.5th percentile of the distribution.
International Spillover Index
- Tracks the environmental, social, and economic impacts of a country's actions on other countries.
- Analyzes impacts embodied in trade, the economy, finance, multilateralism, peace, and security.
Challenges to Measuring the SDGs
- Indicators can be vague.
- Indicators are regularly updated.
- Some targets lack agreed-upon indicators.
- Data availability varies across countries.
- Index ranking and scores should not be directly compared with previous results.
Creating Indexes & Scoring
- Establish performance thresholds and censor outlier data within each indicator.
- Rescale data to ensure comparability across indicators.
- Aggregate indicators within and across SDGs.
Economic Sustainability
- Economic growth: Sustained economic growth is essential for long-term development.
-
Coordination Problem: Complementarities (actions that increase incentives for other agents) can create coordination failure.
- This occurs when agents are unable to coordinate their actions, leading to a less optimal outcome for everyone.
-
The Big Push Model: A government-led effort to accelerate economic development across various sectors.
- Addresses coordination problems through incentivization and investment.
-
Limitations of the Big Push Model:
- Expensive, requires massive investment.
- Lack of information on where to invest effectively.
- Uncertainty about the final economic equilibrium.
- Government corruption can hinder coordination.
The Doughnut Economic Model
- Created by Kate Raworth.
- Aims to meet the needs of all people within the planetary boundaries.
- Safe and just space for humanity: The area between the ecological ceiling and the social foundation, where needs are met without harming the planet.
- Emphasizes regenerative and distributive economies.
Social Sustainability
- Failed promise of development: Capitalism-driven development has not led to improved well-being for everyone.
-
Participatory Development: Emphasizes the need for people to participate in the development process and define goals.
- Important factors for success include:
- People's participation in decision-making.
- Defining development goals collectively.
- Important factors for success include:
Exclusion to Protection to Risk Management
-
Historically: The world has prioritized economic growth and technological advancements.
- Social protection was often neglected.
- Poverty is not static: Chronic and persistent poverty have long-term consequences.
- Social security and safety nets: Difficult to establish during times of crisis and poverty.
- Risk Management: Necessary to accelerate and sustain development.
Three Risk Management Arrangements
- Informal: Relying on social networks and personal arrangements.
- Market-based: Using market institutions like banks, insurance companies, etc.
- Public: Government-provided safety nets and support programs.
Human Rights-Based Development Approach
- Emphasizes the ethical and legal dimensions of human rights.
- Rights are essential for freedom and social progress.
- Rights holders are entitled to claim and exercise rights.
- Duty bearers have the responsibility to respect, protect, and fulfill rights.
- Empowerment is crucial for poverty reduction.
Environmental Sustainability
-
Ecosystem Services: Benefits people obtain from ecosystems, categorized as:
- Provisioning: Material benefits like food, water, and wood.
- Regulating: Benefits like air quality, soil fertility, and flood control.
- Cultural: Non-material benefits like recreation, tourism, and aesthetic appeal.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Test your knowledge on poverty statistics and types in the Philippines with this insightful quiz. Explore current data on income and food poverty, as well as the implications of subsistence levels in the country.
