Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

It’s been one year since we kicked off with The End of Poverty. Our final book for the Development Book Club will be Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty; a well-known book with great reviews. Written in 2011, this book draws on the works we have already read. It should be a good place to end, leaving us with more material to connect the development theory dots.

Poor Economics is written by Professors  Abhijit V. Banerjee and Esther Duflo of MIT and J-PAL. This book doesn’t argue for or against aid and does not claim to have the best solution for ending poverty. Instead it focuses on the choices poor people make in different situations (like choosing a smaller amount of better tasting food over having more not-so-great tasting food). The authors have set up an awesome website with chapter breakdowns and relevant lectures to watch.

Happy reading! Share any thoughts on this book in the comment section below.

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Thanks to the many people who have reached out over the last year- it’s been a pleasure. I hope you’ve learned as much as I have! You can still stay updated on globaldev book news by following our Twitter account. Be on the lookout for a few more career profiles.

What to Think About While Reading “Why Nations Fail”

1. Was the message convincing – why or why not?

2. How will knowledge of inclusive and extractive political institutions be of practical use for you in the international development field?

3. What are other works worth reading related to this book? (Jared Diamond’s Guns, Germs, and Steel comes to mind)

4. What are the strengths and weakness of the methodology (and emphasis on history)?

Here’s what USAID thinks you should think about while you read Why Nations Fail:

5. How do institutions create the incentives that lead to sustained development and poverty reduction?

6. Do you think that institutions explain all of the differences in development across countries, or are some of these differences due to geography, culture, ideas or even just luck (good or bad)?

7. The book argues that China has so far developed with extractive rather than inclusive institutions, and therefore China’s rapid growth cannot continue and may even collapse. Do you agree?

8. What are the implications of the arguments in this book for USAID and how we direct our assistance?

See if it’s at a library near you

Quote of the Week from Why Nations Fail

The people who suffer from the extractive economic institutions cannot hope for absolutist rulers to voluntarily change political institutions and redistribute power in society. The only way to change these political institutions is to force the elite to create more pluralistic institutions.

Page 86

Why Nations Fail

This April we are reading Why Nations Fail, a well known book by Daron Acemoglu and James Robinson. The authors incorporate more history than any global development book so far. In just the first few chapters they use history to explain how different colonization tactics informed the current political systems in the USA and Mexico. They also explain the shortcomings of economics and the need to study political institutions.

The book dispels different myths surrounding why nations fail. For example, popular reasoning argues that geography and culture are some of the reasons for wealth disparities between states but Acemoglu and Robinson combat these misconceptions right away.

I sat down to read the preface and was still reading 2 hours later. This is a captivating book with a lot of information.

We will argue that to understand world inequity we have to understand why some societies are organized in very inefficient and socially undesirable ways. -Why Nations Fail

Happy Reading!

More About Capital in the 21st Century

For a more in depth look, watch this 90-minute talk during his visit to CUNY’s graduate center.

Piketty Explained: Full Summary

The only post on this blog thoroughly breaks down Capital in 30 second and 15 minute summaries.

“Capital”, Summarised in Four Paragraphs

A (very) brief summary from The Economist. The comment section is quite an adventure.

How Gender Changes “Capital in the Twenty-First Century”

This is one of the few articles that discusses a glaring missing component of Piketty’s capital evaluation -gender and race!

“Capital” and the Developing World by Nancy Birdsall

Birdsall comments on where the developing world fits into Piketty’s model for reducing inequality.

Piketty’s brilliant book does not address the issue of global justice, but it does provoke this question: What is the future of a global capitalist system in which economic opportunities and vulnerabilities are evermore integrated and interdependent, but one without the equivalent of a global state to manage its politics and contain its inegalitarian dynamic?

Capital in the Twenty-First Century

Happy New Year! I hope you had a good December sans development overload. I spent it reading through the Harry Potter series.

This month we are reading Capital in the Twenty-First Century by Thomas Piketty. This book sparked a lot of conversation last year surrounding inequality and its causes. Even those who disagree with Piketty’s diagnosis on labour income and capital admit his work adds immensely to the field of economics. Despite the groundbreaking material (or not for those who think he recycles Marx) there remains a lot of room for discussion about how this book relates to developing countries. Nancy Birdsall has written some of her thoughts here.

Piketty is a French economist who spent over 15 years researching wealth and national growth. Because we only have a month, and a lot of this book focuses on Western countries (especially the USA and France), we are going to read “Introduction” and “Part three: The Structure of Inequality” (chapters 7-12). If you have time to read all 600 pages -go for it!

More on Dead Aid

Is Aid Killing Africa? Dambisa Moyo talks about Dead Aid on ABC

Excerpt

Read the first few pages of Dead Aid in The Washington Post.

NYTimes Interview: Questions For Dambisa Moyo

Question: If people want to help out, what do you think they should do with their money if not make donations?
Moyo’s answer: Microfinance. Give people jobs.

 

Cato Institute Video and Podcast

Watch this talk between Moyo and Todd Moss of the  Center for Global Development. He warns against generalizing all aid as bad and draws from his personal experience. Although, his praise of aid working in Ghana may falter in light of recent events.

Why Dead Aid is Dead Wrong

This review is written by ODI Executive Director Kevin Watkins. He criticizes Moyo’s anti-aid theory and believes “the real debate should be over how to increase aid effectiveness.” Thanks to Aid Leap for pointing this one out.

Dead Aid Discussion Questions

1. According to Moyo, why do different approaches to aid fail?

2. What are some reasons we continue to use aid though there is evidence it is not effective?

3. Are free markets a fair playing field and not another instrument of the West?

4. Are African countries hurting each other’s economic growth?

5. What are the benefits of a market approach to development?

Add your questions below.

Defining International Development

While we’re gearing up to start reading July 1st, I thought I would post some relevant articles, about working in and studying development.

First is a segment from “Discourse analysis in international development studies: Mapping some contemporary contributions” by Dimitri della Faille of the University of Quebec. I found the definition of international development on page 218 (page 3 in the pdf) suitable for the diverse range of books and perspectives we will soon read. Faille recognizes the difficulty of defining the ambiguous term and provides a brief history as to how its meaning has expanded from attaining steady economic growth to the diverse goals it is connected to today.

He defines international development as:

“the ensemble of strategies, ideas, policies and institutions put in place since the end of World War II that recognize development, whichever meaning is attached to it (economic growth, poverty reduction, global peace, etc.), as a central  motivation for the actions they undertake.”

What do you think of this definition? How do you define “international development”?

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Della Faille, Dimitri (2011) “Discourse analysis in international development studies: Mapping some contemporary contributions”, Journal of Multicultural Discourses, vol. 6, n. 3, pp. 215-235.