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Poverty Highlights
By Lykke E. Andersen*,
La Paz,
6
October
2008.
Due to an excessive
work load, this weeks' newsletter will highlight a collection of
earlier articles on the topic of Poverty.
Bolivians feel poor, but not that
poor
(L. E. Andersen)
According to official estimates, there are at least 3 million
extremely poor people in Bolivia (about 38% of the total
population). Judging from their very low incomes, they shouldn’t
be able to buy even the minimum basket of subsistence goods. The
majority of people in this group does not have electricity in
the house, and thus none of the convenient inventions that run
on electricity. Still, only a minority of them (18.5%) actually
feel extremely poor
(Continue reading...)
Poverty on a 62-foot yacht in the
Pacific Ocean (L. E. Andersen)
Most of the people who
write about poverty have never themselves been poor (including
myself). This is not so strange, since the poor are too poor to
write, even if some of them have the ability. They do not have
the surplus of energy and time alone that is required to sit
down and write to record or transmit their feelings, thoughts
and ideas. They do not write blogs or diaries and they virtually
never get hired as consultants to study poverty.
Might it be the case
that the ones writing about poverty don’t really understand it?
(Continue reading ...)
Do Your Aid Projects Hurt the Poor?
(L. E. Andersen)
There are many aid
pessimists, like me, who would much rather be aid optimists.
However, the empirical evidence on the effectiveness of foreign
aid is depressing, especially in poor countries where aid
constitutes a significant share of GDP, as in Bolivia and
Nicaragua.
Any particular aid
project is unlikely to actually hurt the poor – at worst it may
be ineffective and a waste of time and money. However, a
continuous series of thousands of aid projects have the capacity
to change the behavior of both individuals and government, and
often in unanticipated and undesirable ways.
(Continue reading...)
The First Principle of Development:
It has to come from within (L. E.
Andersen)
There are many ways for a country to develop, but there is no
way to develop a country: Development has to come from
within.
Just as you cannot
help a child develop by doing his homework, giving him all the
toys and candy he wants, and protecting him from all potential
dangers, you cannot help a country to develop by giving it money,
writing its poverty reduction strategies, or protecting it
against basic market forces.
(Continue reading...)
Envy, Black Magic, Growth and
Inequality (L. E. Andersen)
It has been reasonably well-established in the literature that
not only absolute income levels matter for the level of
happiness, but also relative income levels. You don’t like to
see too much poverty around you (thus the case for altruism),
but you don’t like to see rich, ostentatious people either (causing
envy). This article is mostly about the latter.
If you can’t increase your own income (for example because of
low social mobility), then you can theoretically improve your
happiness by reducing other people’s incomes. This would explain
such unconstructive behavior as vandalism and black magic.
(Continue reading...)
Gross National Happiness
(By
Lykke E. Andersen)
Economists, especially development economists, almost always
measure the level of well-being in a society by per capita
income, noticing that this simple economic measure is highly
correlated with most other indicators of development they can
think of (life expectancy, child mortality, income equality,
education levels, etc.).
However, whereas income per capita correlates highly with a
large variety of social indicators of development, it does not
seem to explain happiness, or subjective well-being, very well.
According to Lears’ Quality of Life Index
(1), for example, people in Nigeria on average feel happier
than people in Austria, despite the fact that per capita incomes
(adjusted for purchasing power) are about 29 times higher in
Austria and child mortality about 40 times higher in Nigeria
(Continue reading...)
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