Sustainable Development and Economic Inequality PDF

Exciting new development idea, huge impact in one location, influx of donor dollars, quick expansion, failure. Big Idea—that once we identify the correct one, we can simply unfurl it on the entire developing world like a picnic blanket. ​ The point is, we don’t know what works, where, or why...

Exciting new development idea, huge impact in one location, influx of donor dollars, quick expansion, failure. Big Idea—that once we identify the correct one, we can simply unfurl it on the entire developing world like a picnic blanket. ​ The point is, we don’t know what works, where, or why ○​ The only way to find out is to test these models—not just before their initial success but afterward, and constantly. Development projects thrive or tank according to the specific dynamics of the place in which they’re applied. ​ It’s not that you test something in one place, then scale it up to 50. ○​ It’s that you test it in one place, then test it in another, then another. Complex adaptive systems =We all understand that every ecosystem, each forest floor or coral reef, is the result of millions of interactions between its constituent parts, a balance of all the aggregated adaptations of plants and animals to their climate and each other. Adding a non-native species, or removing one that has always been there, changes these relationships in ways that are too intertwined and complicated to predict. international development is just such an invasive species. Why Dertu doesn’t have a vaccination clinic, why Kenyan school kids can’t read, it’s a combination of culture, politics, history, laws, infrastructure, individuals—all of a society’s component parts, their harmony and their discord, working as one organism not that development is broken, it’s that our expectations of it are rich countries need to spend less time debating how to divide up the tiny sliver of our GDP we spend on development and more time figuring out how to leverage our vast economic and political power to let it happen on its own Chapter 1: Introduction to Sustainable Development 1.What is sustainable development? ​ Tries to make sene of the interactions of 3 systems = world economy, global society, and earth physical environment ​ It is normative outlook on the world → what should happen/is morally right → recommends a set of goals that the would should aspire ○​ Economic progress is widespread ○​ Extreme poverty is eliminated ○​ Social trust is encouraged through policies that strengthen a community ○​ Environment is protected from human-induced degradation ​ SDGs = social inclusion and environmentally sustainable economic growth ​ 4th objective = good governance → government and business ○​ Health care, education, provision of infrastructure, protection of individuals from crime and violence, promotion of basic science and new technologies, implementation of regulation to protect the environment ​ Reverse can often happen → corruption, war and absence of public services ​ Multinational companies = can be most powerful actors ○​ Well Being depends on them obeying the law, respecting natural environment, and helping communities in which they operate, especially to eradicate poverty ​ Often these companies engage in public corruption, bring officials to ben regulation and tax policies in favor of them (tax evasion), money laundering and reckless environmental damage ​ World Conservation Strategy: Living Resource Conservation for Sustainable Development (1980): ○​ Human beings, in their quest for economic development and enjoyment of the riches of nature, must come to terms with the reality of resource limitation and the carrying capacity of ecosystems, and must take account of the needs of future generations ​ We need to realize there is resource imitation and need to think about future generations ○​ Purpose of this doc = advance the achievement of sustainable development through the conservation of living resources ​ Definition of sustainable development have evolve into a more practical approach → doesn;t focus in intergenerational needs as much and now focuses on a holistic approach​ ○​ Linking economic development, social inclusion, and environmental sustainability The Role of Technological Change: ​ 3 aspects of technology: ○​ Technological advances are the main driver of long-term global economic growth ○​ They often have negative side effect → even if their direct effects are positive ○​ Technological advance is under human guidance Sustainable Development as a Normative Approach: ​ Urges us to have a holistic approach of what a good society should be  ​ 5 corners about distribution of well being: ○​ Extreme poverty ​ Aim to end it ○​ Inequality ​ Reduction of gaps between wealthy and poor ○​ Social mobility ​ Want to have a high degree of social mobility → good life chances for children born into poverty ○​ Discrimination ​ Gender, race, religion, ethnicity ○​ Social cohesion ​ Fostering social trust, mutual support, moral values, cohesion = social inclusion ​ We also need to prioritize our natural environment Trade-offs vs Synergies in Economic, Social, and Environmental Goals ​ Efficient = absence of waste in the economy ○​ Can't raise someone's income or wellbeing without lowering someone else's ​ Equity = fairness in the distribution of the pie (fairness can mean something to different to everyone) ​ There is a tradeoff between efficiency and equity Measuring the size of the economy ​ A countries economic development is summarized by GDP → it measures the market value of total production within a country ​ GDP per person = GDP/population ​ Measurement of GDP: ○​ Measures inside the boundaries of an economy ​ A country is an oil exporter and the government owns ⅔ and a foreign company owns ⅓ ​ GDP coils all the ol produce but national income only counts ⅔ = what the government owns ○​ This is called GNP = gross national produce → income based measure ○​ Measure output at market prices ​ Each output (sales of haircuts) quantity produced is multiplied by pric per unit to calculate value of production ​ To compare across countries → national currencies are convert to US dollar = market exchange rate ​ Dividing each nations population = GDP per capita → gives indication of the living standards across countries ​ When we compare GDP we want to compare volume of goods and services → not the difference of market prices ​ Adjust to PPP = purchasing power parity → common set of international prices assures that $1 of GDP in every country has an equal purchasing power in terms of goods and services  ​ GDP only measures goods and services transacted in the market economy → not tings that take outside of it ○​ When a parents looks after her own children, home daycare isn't includes ○​ But if she looks after a friend child for a fee, that is counted in GDP Defining Economic Growth ​ Economic growth → measures changes in GDP → when there is growth, there is an increase in GDP ​ GDP per capita and rise of output of goods and services ○​ GDP at constant prices ​ When GDP per capita increase, well being usually increases too ​ This is not always the case → people can end off worse when GDP rises ​ Rule of 70 ​ GWP (total output of the world) rise = associated with rise of industry = coal mining, steelmaking, textile production ○​ First take off of economic growth = 1750 - 1850 → Industrial Revolution ○​ 1950 = rise of GWP is associated with rise of services like banking system (at least in high-income countries) ​ Reason for rise in world population = increased ability to grow more food and feed a growing population ​ Humans harness tech to raise food production ​ Since 1750 → farmers can grow more food because of better seed varieties, farming techniques, chemical fertilizer to boost soil nutrients, and machinery to sow seeds, harvest crops and process food stuff and store moe food to cities ​ Modern economic growth and global population increase have come in tandem but they have a complicated relationship ○​ Economic growth = rising output per person combined with population growth ​ Together = more income per person and people on the planet → massive expansion of total economic activity ​ GWP = GWP per capita x world population Recent Growth of China: ​ Since 1978 = fastest growing economy → Deng Xiaoping undertook basic market reforms → he opened Chinese economy to market forces and international trade ​ Growth of 10 percent → doubling its GPP every 7 years ​ It is the largest trading country and industrial workshop in the world ○​ Rural to urban ○​ Agricultural to industrial and service-oriented ○​ Lower fertility rates and child mortality ○​ Higher life expectancy, improved public health ○​ Education attainment has steeped → more PHDs per year than any other country ​ All happened in 3 decades ​ 3 downsides:  ○​ Rapid from rural/farming to urban/industry and services has disrupted many lives = mass migration in China that has disrupted families → people have left to find work in cities while leaving grandparents and children in the countryside ○​ Inequality of income has increased → urban workers have better living standard and people that live in rural areas have stagnated ○​ Environment has been defeated = mass pollution as a result of mass industrialization ​ Pollution is causing wide spread disease, premature deaths, slowing china life expectancy ​ Need to achieve sustainable development with its rapid economic growth = it is also socially inclusive and environmentally stable Improvements in Global Health ​ Improvement in public health as a result of global growth in GWP per capita ​ Higher incomes = improved food security ​ Advances in technology in agricultural and industry → antibiotics, vaccinations, diagnostics, improvements in surgery ​ Improved provision of water supplies, sewerage, household sanitation ​ 134 - 37 infant mortality ​ Economic lessons of recent history: ○​ Increase in GDP per person with structural changes in society = rural life as farmers → urban life with employment in industry in services ​ Less death of children → greater health and longevity for most people ​ Life expectancy higher than it was in middle of 20th century Continuing Poverty in Midst of Plenty ​ Poverty = lack of adequate income ​ extreme poverty = inability to meet basic needs for food, water, sanitation, safer energy and a livelihood ○​ Lacking modern energy for safe cooking = no natural gas but wood burning stove ○​ Not secure schooling for children ○​ As many as 2.5 billion people living in extreme poverty ​ Economies with low GDP per capita = households with extreme poverty ​ Poorest countries in the world = tropical sub-sahara, south of North africa, and north southern tip of Africa ○​ Next is south asia ​ Community Healthy Workers (CHWs) in poor villages and slums who bring healthcare to people who would otherwise be disconnected Global Environmental Threats Caused by Economic Development ​ Hydrometeorological disasters = climate shock ○​ Water and weather related disasters = heavy precipitation, extreme storms, high-intensity hurricanes and typhoons and storm-related flood surges ​ Other climate catastrophes = spread of diseases, pests threaten food supplies and survival of species ​ Anthropocene = humanity through massive impacts of world economics is creating major disruptions to Earth's physical and biological systems  ○​ Main drivers = use of coal, oil natural gas = primary energy sources → fossil fuels ​ When we burn fossil fuels, gas moves to vehicles that transforms them into steel and cements and it produces electric → the combustion process produces co2 which is emitted to the atmosphere ​ CO2 in atmosphere is the main source of human induced climate change ​ Depletion of freshwater sources, pollution from heavy use of chemical fertilizers, change in ocean chemistry (increase in ocean acidity from CO2 in atmosphere that dissolves into ocean water), clearing of forest to create new pasture/farmland, particulate pollution caused by industrial processes Pathways to sustainable development ​ Scientifically and morally based problem solving Chapter 2: An unequal world 1. Incomes Around the World ​ Gross = measuring every market transaction within a county ​ Domestic = economic activity inside a county ​ Production = flow of new output in a given year ​ Used to get a sense of a country standard of living ​ GDP per capita ○​ Total production in country over a given time period/population ​ What the World Bank and other IGO’s use to summarize a countries current development ​ World Bank places countries into 3 categories bases on GDP per capita: ○​ High Income ​ $12,616 per person per year ○​ Middle Income ​ Between $1,035 and $12,615 per person per year ​ Also has Upper Middle income and Lower-mIddle income = splits between $4,085 per person per year ○​ Low Income ​ Below $1,035 per year ​ Least Developed Countries = LDCs (UN classification) ○​ Disease, education and social instability are bad ​ Tends to be poorer island countries ○​ Vulnerable to drought, floods, conflict and violence ○​ A lot of times are landlocked = economic development depends heavily on trade, which is much harder for landlocked economies ○​ Also included small island economies: ​ Vulnerable to climate catastrophes and isolated with small popular.ion and high shipping cost to major ports ​ 2 important details when measuring GDP: ○​ Nations transactions are measured in its own currency, so currencies must be converted to a common currency = exchange rate ○​ Need to remember there are difference of costs or prices in different countries and that prices can vary across countries who converted to dollars ​ Rent, personal services like haircuts ​ Haircut in Mogadishu might be 1/100 of what it would be in Paris  ​ GDP per capita is sometimes measured using the common standard of international prices = Purchasing Power Parity (PPP) ○​ PPP adjustment is largest for poorest countries → poor Africa country could have a GDP per capita in the PPP unis 3-4 times larger than the GDP expressed market price ​ We classify economic development by GDP per person, adjusting for population, currency and price level 2.Urban-Rural Inequality ​ Urban area is a place where several thousand people live in a density settled area ○​ Urban agglomeration = millions living in a single densely settled area ​ Difference: ○​ Work ​ Agricultural is mainstay of rural aries and services are the mainstays or urban areas ​ When countries experience rising proportions of their populations in urban areas, it also signifies a rising population of labor force in industry and services and a declining in agriculture ​ A universal trend in process of GDP per capita rising ○​ Income ​ Income in urban areas tends to be higher ​ Rural populations are settled in food-growing areas vs urban areas tend to locates at coasts or along rivers, where it is easier to engage in sea-based trade ​ As countries urbanized, the tend to have more of a coastal orientation = higher proportion of population living near the sea ○​ Population density ​ Number of people residing per square mile or square kilometer ​ Usually low in rural areas since each farm family needs a high ratio to land people vs urban areas high because more people are packed into a small area ○​ Public Services: ​ In rural areas, it is hard to provide electricity, piper water, and sewage systems ​ In urban areas, there tends to be higher income levels, health standts and overall living standards ○​ Fertility rates; ​ Higher in rural areas and lower in urban areas ​ Urbanization is associated with higher incomes, better public services, better education, and declining fertility rates 3.Income Inequality within Countries  ​ We want to measure the inequality of income within the country → can look at the ration of incomes as the top and those at the bottom, sometimes comparing the average incomes at the top = Gini coefficient ○​ 0.0 - 1.0 and 0.0 = complete equality of income (every person per household has the same income) ○​ 1.0 = inequality (all income is owned by 1 person to household, with the rest having no income) ​ Gini coefficient among high-income countries shows there are different pathway to economic develop​ ○​ Northern europe = becoming weather with considerable social equality vs US shows higher income alongside higher inequality ​ Education levels also indicate source of inequality ○​ Higher education = higher income levels → urban areas often finder better employment prospects as well and higher incomes ○​ People who are unable to get an education usually end up with lower paying jobs and often times left in villages as smallholder farmers who barely survive ​ Discrimination ○​ Women, racial, ethnic, religious ​ Government policies ○​ Corrupt governments that use their revenues for small class of insiders tied to the government ​ A lot of time countries that live off mining ​ Natural resource curse = paradox that a country with abundant and natural resources ends up poor and undeveloped with massive corruption and inequality ○​ If govts can use revenue to ensure widespread access to education and healthcare, they can narrow income inequality while also raising overall economic efficiently 5.Measuring Wellbeing ​ Human Development Index (HDI) created by the UNDP ○​ average of income, education and health UNDP created the HDI ○​ Holistic account of human development by taking into account the important things that empower people and help them meet their capacities ​ Takes incomer per person as one of the dimensions = measures logarithm of income per capita ○​ Used educational attainment and health ○​ UNDP Categories countries as High, Middle and Low levels of Human development ​ Equatorial is rich GDP per capita but poor in HDI ​ South korea is higher on the HDI in compared to their average income per capita 6.Subjective Well-being ​ What do we learn when we study the differences in life satisfaction around the world we evaluate sense?  ○​ Income per person (GDP per capita) matter, but as just one aspect of happiness → a second major reason for happiness is “social capital = the quality of social environment and community ​ Availability of mental health services is therefore a key intervention in raising life satisfaction for people suffering from mental health disorders ​ Person values and values of society are related to happiness ​ People who have strong materialist values do not purport as much life satisfaction as those with less materialistic orientations ​ Societies will become unequal if main focus is to purse income per capita ​ If we are driven by goal of increased incomes and consumerism, we are unlikely to achieve happiness and life satisfaction we desire ​ Should also focuses on health, social inclusion, honest government, and networks of social support and altruism ​ Societies will benefit if they find ways to promote the values of generosity, compassion and volunteerism rather than individualistic materialism 7.Convergence vs Divergence ​ Convergence = narrowing the proportionate gap of poor and rich countries ​ Divergence = poorer country is becoming more poor while richer country is becoming richer ​ Industrial Revolution (1750-1850) ○​ Economic process of divergence → GB, US and other places were becoming recher because they were industrializing while the poor remained poor, living in peasant farming, untouched by new inventions of the steam engine, railroad, telegraph and other advancements ​ Imperialism → as Western Europe become more industrial and militarily dominant, it also seized political control over more and more of the world (political setback to the potential convergence) ○​ Colonized people did not undertake key steps for economic development = improving infrastructure and raising education levels ​ The colonizers were not interest in their economic and social development because they were focused on extracting resources of those countries for the benefit of their country and its industries ​ Decade after WW2 = end of imperialism and countries around the world gained political independence ​ Prior to 1950s = faster economic growth in poorer countries ○​ Further technological development = better transport, communications and new info enable poor countries to pick up the pace of their economic development ​ Past half century = tendency towards convergence ​ Crucial goals of SD is that all of tods lower income countries (especially LDCs_ should make transitions through convergence to middle-income status Chapter 3: Brief History of Economic Development 1.The Age of Modern Economic Growth ​ Before the start of the IR around 1750 = world was nearly equal in poverty → world was rural with peasant farmers ​ Todays inequality = era of modern economic growth, ther period since the start of the IR ​ Total output of the world (sum of GDP in each coutry_ has 2 parts: ○​ GDP per person in the world ○​ Population ​ Eighteenth century, world population increased a lot ○​ Enabled by changes in economic and technological know=how → most importantly the ability to grow food allowing us to sustain a larger population ​ Output per person also soared ​ Before IR, the slow rate of profess was because of 2 reasons = the absence of technical improvements and failure of capital to accumulate 2. The IR Beings in England ​ Modern economic grown began in England ​ What is is about the IR? → for the first time, society moved beyond agriculture as the economic base to one in which industry was the economic base ○​ A worldwide supply system began to emerge → transactions required markets, insurance, finance, property rights of a modern market-based economy ​ England was the place where these factors first aligned ​ Agricultural productivity rose, more urbanization, more trade, market economy rose, property rights, rule of law, scientific revolution of the 1500s and 1600s ​ 1712 = investigation of the steam engine by Thomas Newcomen → James Watt improved invention and in 1776 steam engine came to life ○​ Now possible to harness massive amount oc coal-powered energy efficiently and economically ​ Via rivers, canals, and roads, coal and iron ore deposits where able to be transportable in England  ​ Adam Smith= first economist to explain workings of a modern economy in terms of specialization and division of labor ○​ Gave us the Invisible Hand = individuals acted out of their own self-interest, trading in the marketplace, and bring about a rise in producing and “wealth of nations” ​ Factories operation with more powerful steams engines and made new forms of transportation ○​ Production of steel = expansion of cities, industries and infrastructure ​ Karl Marx = bourgeoisie, new capitalist class developed → they create a world after its own image 3. The Great Waves of Technological Change ​ Endogenous growth = economic advantage that emerges from internal working of the economy ○​ Process of dynamic return to scale or chain-reaction economy ​ Innovation spur further innovations = keeping the growth process alive ​ New innovation cause growth in GDP, increasing purchasing power of the marker for further innovations ○​ potential investor increase their research and development (R&D) in search of profitable innovations ○​ Technological breakthroughs raised GDP → raised incentive for innovations since higher GDP offers prospect of higher profits for new products and processes ​ Laggard country = politics and geography lagged behind as the technological leaders charged ahead ​ Catch-up growth = technologies that fuel is come from outside the economy that needs to catch up → import technologies from abroad rather than develop in home ○​ Can be faster than endogenous growth ​ Rapid growth is about closing gaps and not investing new economic system or technologies ​ China, South Korea, Singapore (had a strong role of government to catch up) ​ 2 different version of growth = continuing innovation or closing the gap by adopting the technology of those ahead ​ IR = steam power + steel production = heavy machinery, railroads ocean steamers, cars, combustion engine ​ Kondratiev Waves = economic development was propelled by waves of technological change but also was the source of economic crisis ○​ Steam engine, textile industry (1780-1830) ​ Panic of 1837 ○​ Railway, steel (1830 - 1880) ​ Commodities were profitably shipped and traded in intl markets ​ Long depression ○​ Electrification, chemical (1930-1970) ​ Coal-fired steam turbines and hydropower  ​ Great depression ○​ Automobiles, petrochemicals (1930-1970) ​ 1st and 3nd oil crisis ​ Expanded mass transport, changed how we live, were and how we produces goods and trade ○​ Information and communication technology = ICT (1970-2010) ​ Financial and EU-debt crisis ​ Knowledge economy = date can be stores, processed, and transmitted globally for use in every sector of economy (education, health, finance, entertainment, production, logistics, agriculture) 4. The DIffusion of Economic Growth ​ Since 1820, per capita growth of US have average around 1.7 per year ​ Most of the world economic growth has been to catch up with the technological leaders ○​ 1 bil ppl do not have access to electricity in 21st century ​ Second type of growth = diffusion → spreads from one place to another ○​ Proximity = countries that were close to GB in the nineteenth century had an advantage, US in the twentieth century, Japan. South korea and china in early 21st century had a different in catch up growth ​ Economic growth typically starts at coast of country and moves interior after a lag, why at the coast? ○​ Conditions of trade, specialization, and market dynamics are easier at the coast → lag is long because transportation costs are high to bring good and services to the interior of country/continent, expect for places that are near rivers or man-made canals ​ Countries with agricultural potential are more likely to make rapid advance in farm yield that in turn free uop labor work in industry serves ​ Places with own energy resources =- advantage ​ nineteenth century, regions with coal had an advantage → In the twentieth century, regions with oil and natural gas had the advantage → In the twenty-first century, perhaps the desert regions, with massive potential for low-cost solar energy, will now have the advantage ​ Physical environment conducive to human health → tropica have dexcess disease burden ​ r960s and 1970s, many countries could not catch up simply because they were under foreign rule ○​ European empires held most of Africa and much of Asia in economic stagnation ​ imperial pow-ers were not interested in the economic development of their colonies. They were more interested in the exploitation of the primary commodities ​ Deposit dictators often run the economy for personal or tribal benefit and not for the country Historical Patterns of Catch-up growth  ​ To measure extreme poverty = threshold of GDP per capita of $2,000 measured in PPP prices ​ political independence of those colonies that national governments were able to start investing in the education and infrastructure needed for catch-up growth ​ first major economic advance (measured by achieving $2,000 per capita GDP) outside of Europe occurs in places settled by Britain itself, such as the United States and Australia. ○​ British offshoots had several favorable conditions for catch-up growth: vast arable land and energy resources, good coastlines for trade, strong connections with British industry, and technological knowledge. These countries had achieved modern economic growth by 1860 ​ The next group of countries, which achieved by 1900, includes Argentina, Uruguay, Chile, and Japan. ​ All of these are temperate-zone countries with favorable conditions for agriculture ​ Japan became the first Asian economy to achieve catch-up growth. ​ Rest of the world had to wait till after 1950 to have rippled of modern economic groth reach theirs ○​ Colonized regions did not experience economic growth until decolonization in 1940s-1960s Economic Development since WW2: The Making of Globalization ​ 1900 = gaps between rich and poor ​ WW1 in 1914 = global economy hit because of war and chaos → deaths, violence infectious disease (1918 flue pandemic), revolutions, specifically 1917 Bolshevik Revolution that gave birth the USSR Communism ○​ WW1 caused political and financial crisis that caused monetary and financial instability in 1920 thats we a key factor for the Great Depression in 1929 ​ GD reason for rise of Hilter in 1933 and facism in Japan in 1930s ​ Also caused mass deaths of 1914, economic causes in 1920, GD in 1930 and onset for WW2 in 1939 - 1945 ​ 1945 world was divided into 3 parts: ○​ First world = US, western europe Japan → market oriented, industrial ​ Recovered from damage of WW2 quickly ​ Endogenous tech driven economic growth, high living strands and income ○​ Second world = communist countries ed by USSR (China after 1949) ​ Economic stagnation ​ 1970s = economic development halts causing second world countries ot being reforms ​ Some took loner to break free because USSR refused similar reforms, until Gorbahcev came to power in 9185 in began his own reforms → 1989 = democratic and economic revolutions if Eastern europe → 1991 - fall of USSR ○​ Third world - countries escaping colonial rule  ​ Late industrialization = local factoring producing for multinational companies → SK and taiwan produce electronic goods/clothing for US and Europe ​ Asian Tigers = South Korea, Taiwan, Hong Kong, Singapore ​ Poor countries were able to become part of global production systems when they offered good infrastructure, transport, and low-cost and reasonably skilled labor ​ Flying geese model Chapter 4: Why Some Countries Developed While Other Stayed Poor The idea of Clinical Economics ​ Climate zones matter ○​ Temperate-zone regions → development came earliest ○​ Came first to coastal countries and then reach landlocked countries (Afghanistan, Bolivia, Mongolia) ​ 3 main points: ○​ 1. Modern economic growth was a diffusion process → started in Britain and diffused all over the planet ○​ 2. Paters of diffusion are discernible ○​ 3. Different kinds of facts have been at play and continue to change ​ Clinical economics ​ 7 items of poverty checklist: ○​ 1 poverty trap = when country is too poor to make basic investments it needs to escape from material deprivation and economic growth ​ 2 ways to break poverty trap = government borrows fund it needs for public investments and counts on future economic growth the fill the government coffers to repay loans vs. foreign govts, businesses, foundations, and inlt institutions provide temporary assistance to finance urgent needs (development assistance) ​ ODA = official development assistance = when govts and agency provide help ​ Private Development assistance = NGOS and private institutions provide help ○​ 2. Poverty coil result from bac economic policies ○​ 3. Poverty could reflect financial insolvency of the government ○​ 4. Poverty might be result of physical geography ○​ 5. Country might be suffering from poor governance as opposed to poor policies ○​ 6. Continuing poverty bay be cultural barriers ○​ 7. geopoliticas (political and security relations) with neighbors, foes, and allies → Afghanistan ​ Millennium Development Goals (MDGs) = UN'S global goals ot fight poverty  ○​ Underneath it institution have ben created to channel ODA purpose = Global Fund to FIght Aids, Tuberculosis and Malaria (GFATM) Further look at Geography - Transport, energy disease and crops ​ Geography and Policy Implications: ○​ Landlocked ​ Build good roads, rail to the port, maintain good relations w/ coastal neighbors, emphasize internet-based export activities to defeat location ​ Proximity to sea-based trade allows exports to world marks at competitive prices → enables economy to obtain input from rest of world at low costs ○​ Water stressed ​ Emphasize irrigation, e.g., using new solar-powered irrigation pumps for smallholder farmers; specialize in crops that do not require huge amounts of water ​ Extremely dry regions are usually impoverished areas because growing food is difficult ○​ Heavy disease burden ​ Scale up public health interventions to control climate-related disease ○​ Natural Hazards ​ Understand the changing probabilities of events like floods, droughts, cyclones, extreme storm, and others, and prepare for them with public awareness and physical and social infrastructure ○​ Lack of fossil fuels ​ Examine and develop alternative options for domestic energy sources, such as geother-mal, hydro, wind, and solar power; empha-size energy efficiency ​ Countries that lack fossil fuels can still achieve economic growth by exporting goods/services to pay for energy imports, or by tapping domestic energy resources like hydropower when available ​ Resource curse = some resource rich countries are badly mismanaged with their resource wealth → cash flows related to oil exports lead to corruption political instability as rival factions vie to grab oil earnings ○​ Nigeria Role of Culture - Demography, Education and Gender ​ Cultural attributes change overtime ○​ Rich often blame poor for their problems —> attributing poverty to factors like laziness or wrong set of beliefs ○​ When a place is poor → its reputation is being lazy but if and when it becomes rich, their reputations changes ​ Japan ​ High fertility rates affect economic development → populations with young children, poor families have a difficult time providing basis for all children  ○​ Countries that have shifted from high to low fertility rates have tended to have an advantage in economic development ​ Age-population pyramid = populations age distribution ○​ Poor countries still have a pyramid shape w/ a high TFR and very wide base of young people ​ Education ○​ Big part of Korea's economic advance = commitment to board, high quality education for everyone ​ Society that run on half brain power and talents → disenfranchises half the populations → blocks women from problem solving, economic leadership, politics, bound to fall being other countries empowering all their citizens ○​ Rawana = 60% of parliament is female Role of politics ​ Not good = bad policies, financial insolvency, poor governance, adverse geopolitics ​ Role of govt in economic development is crucial → effective govt is necessary to ensure economic opportunity for both the poor and rich ​ Govt = vital for rule of law ​ Govts need to regulate key sectors of economy including finance ○​ 2008 when the deregulation on Wall Street ​ When govt fails or govt encourages illegality or fraud in the banking system, financial panic ensures ​ Corporate lobbying can results in massive amount of corruption and failures of the regulatory process ​ Govts should invest for poor children —> make sure they get the boost they can have a good shot at prosperity ​ Organization for Economic Co-operation and Development (OECD) = large variation between govts in their investments areas such as protection against poverty and provision services ○​ Some countries attend to needs of the poor and create conditions for high social and economic mobility ​ Others (US), leave the poor to their fate = lack of intergenerational mobility and replication of poverty across generations ​ Consequence of US = higher inequality of income = higher rate of child poverty and lower rate of social and income mobility across generations ○​ The US is no longer the land of opportunity and social mobility ​ SD = social inclusion – everyone should have a chance Which Countries are still stuck in poverty? ​ ⅓ of africa is landlocked because of colonialism ○​ Politicians divide up africa at the Berlin Conference (1884-1885) that cut across natural ecological areas or divided ethnic groups  ​ Eve of independence of 1960, DRC had fewer than 20 uni grads in a population of 13 million → European powers did not provide education because they saw it as a political risk ​ In Africa, where there were more difficult topographical and geographical conditions and many political divisions, the European colonial powers did not sit down together to construct a railway network ○​ each imperial power typically constructed its own rail, perhaps from a port to a mine or plantation Chapter 14: Sustainable Development Goals The Sustainable Development Goals (SDGS) ​ 1972 = first UN Conference on the Human Environment in Stockholm ○​ challenge of combining economic development and environmen-al sustainability would pose huge threats in the twenty-first century. ​ Rio Earth Summit = Rio de Janeiro at the UN Conference on Environment and Development met in 1990ish ○​ adopted two environmental agreements, the UN Framework Convention on Climate change and the Convention on Biological Diversity (CBD), and also laid the groundwork for a third that was adopted two years later, the UN Convention to Combat Desertification. ​ Rio+20 summit in June 2012, met for a third time in at Rio, at the UN Conference on Sustainable Development ​ Transition from MDGS - SDFS ○​ Rich countries like the poort have to promote more social inclusion, gender equality, and energy systems that are low carbon and resilient ​ SDSN = Sustainable Development Solutions Network → unis around the world in partnership with governments, business and non governmental organizations ​ 9/15/2015 = 3 pillars of SD → economic development (including end of extreme poverty), social inclusion, and environmental sustainability ○​ 17 goals were created ​ UN General Assembly adopted 169 more detailed target distribution among the 17 goals ​ UNGA said each nation should choose its national targets based on their own circumstances/priorities → countries are expected to report on agreed set of indicators to measure progress towards the goals and targets  ​ End of 2020 = date for completing SDGs ​ Why do goals matter? ○​ Critical for social mobilizations ○​ Peer pressure ○​ Mobilizing epistemic (knowledge) communities → networks of expertise, knowledge and practice around specific challenges like growing food, fighting disease, designing and implementing city plans ​ Mobilize stakeholder networks ​ MDGS biggest accomplishments = in health, why? ○​ They were stated in terms of specific, quantifiable targets, so profess and outcomes could be measured and assessed ○​ Seemed more manageable because the epistemic communities help map pathways to achieve them ○​ Fundings = global fund to fight Aids, tuberculosis, and malaria (GFTAM), presidents emergency plan for Aids relief (PEPFAR), presidents malaria initiative (PMI) ○​ Succeeded because of monitoring, measurement, evaluation, and feedback to program design ​ Sanitation, education = MDG is lagging ​ SDG’s → challenges = more complies ○​ Natural time horizon for results is long term ○​ goals will be universal, requiring action of all parts → rich and poor ○​ two specific tools that will be important for translating SDGs into reality. ​ Backcasting = rather than guessing what will happen in 2040 or 2050 set the target for a certain date and analyzes the problem from the target to the present (backward in time) to chart a course between today and goal ​ Backcasting = How can we get from here to there? ​ Road-mapping = asks deep questions about pathway from today to the future goal. ​ What does the policy terrain really look like? What are the big challenges? ​ SDGs = multistakeholder process → every party of society must be involved Financing Sustainable Development ​ Pay for it in 2 ways: ○​ We participate in markets as consumers and supplies ○​ We buy things that we need by paying taxes so govts can provide public services = building roads, healthcare, public education. fire/police ​ All of us will pay for SD in both ways = through markets and through political institutions ​ Private sector approach = does not solve critical problems ○​ When the challenges is fighting extreme poverty, markets are designed to ignore the poort, because they are not a good consumer  ​ Merit goods = —health, education, areas where government should provide services whether people can pay for them or not, because these are meritorious goods that should be universally accessible ​ public financing is essential to ensure the poor have access to merit goods ​.Public financing is also essential in areas where it is hard to recoup the returns on an investment in a direct cash sense. ​ Important for social insurance ○​ Even when financing is strictly in the private sector v → a proper regulatory framework and corrective measures are important to make sure that the private sector is investing in the right areas and is driven by market signals that are giving accurate indicators of overall social costs and social benefits ​ Taxpayers in one country help provide services on another through aid = official development assistance → ODA Principles of Good Governance ​ Encompasses the public and private sector → especially the large multinational corporations in the private sector ​ Shared principles of governance: ○​ Accountability ○​ Transparency ○​ Participation ○​ Mulistakholder approach ○​ We all need to clean up after ourselves ○​ Clear affirmative commitment to sustainable development Summary: ey Ideas: ​ Development Challenges: ○​ Many development initiatives fail when they attempt to apply a single solution globally. What works in one location may not succeed elsewhere due to unique cultural, political, historical, and geographic factors. ○​ Development operates like a complex adaptive system, much like ecosystems where introducing or removing a species leads to unpredictable changes. Similarly, development efforts must be context-specific and constantly re-evaluated to ensure they adapt to local conditions. ​ Economic Inequality: ○​ GDP and Living Standards: Gross Domestic Product (GDP) per capita is used to measure a country’s standard of living. It adjusts for population size and currency differences, with adjustments like Purchasing Power Parity (PPP) accounting for varying costs of living. Poorer countries often show significant increases when GDP is measured with PPP due to lower living costs. ○​ Urban vs. Rural Disparities: Urban areas have higher incomes, better public services, and access to jobs in industry and services. Rural areas, focused on agriculture, often lack infrastructure and opportunities. Urbanization typically leads to economic growth and declining fertility rates. ​ Income Inequality: ○​ Measured by the Gini coefficient, income disparities are influenced by education, governance, and systemic discrimination. High-income countries like the U.S. show rising inequality compared to socially equitable models in Northern Europe. ○​ Education is a critical factor—higher education levels correlate with better employment opportunities and incomes, while those without access remain trapped in poverty. ​ Historical Economic Development: ○​ Before the Industrial Revolution (IR), most of the world lived in rural poverty. The IR (1750–1850) transformed economies by shifting from agriculture to industry, leading to significant increases in output and population growth. ○​ Divergence began as industrialized nations like Britain and the U.S. grew richer, while colonized nations were exploited for resources rather than developed. Post-WWII decolonization allowed these nations to begin their own paths toward growth. ​ Sustainable Development Goals (SDGs): ○​ The SDGs, developed in 2015, evolved from the Millennium Development Goals (MDGs). They aim to address economic development, social inclusion, and environmental sustainability through 17 goals and 169 targets. ○​ Unlike the MDGs, the SDGs require universal participation from both rich and poor countries, making their implementation more complex. Techniques like  backcasting (starting with a goal and planning backward) and road-mapping (identifying key steps toward a goal) are essential tools. Concepts in Development: ​ Poverty Traps: ○​ Nations can be trapped in poverty due to lack of resources for basic investments, poor governance, adverse geography, or weak infrastructure. ○​ Breaking these traps requires targeted investments through official development assistance (ODA) or international support for healthcare, education, and infrastructure. ​ Cultural and Political Influences: ○​ High fertility rates hinder economic progress, as larger families struggle to provide for all children. Countries like South Korea that prioritized broad, high-quality education have seen significant economic gains. ○​ Gender equality is vital. Nations that exclude women from leadership, education, and economic opportunities limit their potential for growth. For example, Rwanda's parliament is 60% female, demonstrating how inclusion fosters progress. ​ Technological Growth: ○​ Economic advancement occurs through two mechanisms: ​ Endogenous growth: Innovations generated within a country lead to further technological advancements. ​ Catch-up growth: Countries adopt existing technologies from advanced nations, which can drive rapid development (e.g., China and South Korea). ○​ Technological revolutions, from the steam engine to digital communication, have propelled waves of global growth but also caused crises, such as the Great Depression. Sustainable Financing and Governance: ​ Financing SDGs: ○​ Achieving the SDGs requires a combination of market-based and publicly funded solutions. Private markets often neglect critical sectors like health and education because they are not profitable. Public financing ensures these "merit goods" remain accessible. ○​ International aid, such as ODA, remains essential for supporting low-income countries. Governments must also regulate markets to ensure investments align with societal benefits. ​ Good Governance Principles:  ○​ Governance must be transparent, accountable, and inclusive. Effective governments balance policy to promote equitable opportunities for all citizens, reducing intergenerational poverty and ensuring social mobility. ○​ Countries with poor governance often suffer from corruption, resource mismanagement, and lack of investment in infrastructure and education. These issues perpetuate poverty and inequality. Why Some Countries Remain Poor: ​ Geography plays a significant role in economic outcomes. Landlocked nations face higher transportation costs, while water-stressed regions struggle with agriculture. ​ The "resource curse" affects many resource-rich countries, where wealth from resources like oil leads to corruption and political instability instead of equitable development. ​ Colonial legacies left many countries without infrastructure or educated populations, creating lasting barriers to growth.