Comments for Corina Murafa

Comment on Ending Poverty. What Approach Works Best. by George

George — Sat, 27 Feb 2010 18:42:13 +0000

I am not sure you understood my point correctly. When I am thinking of institution building I wasn’t speaking of authoritarian governments – the cases of China and Vietnam. Although China has made a huge progress in the past 30 years and has become the 2nd largest economy in terms of GDP, the Chinese development model is highly dangerous because it involves basically a state driven pattern aimed at preserving the current leadership of Communist Party. As such I cannot really consider it a success or a pattern that should be followed by poor countries. Although this model lifted China from poverty, it did so by denying basic political rights. Therefore I cannot really accept the Chinese case as a pattern of successful development. Poverty is indeed bad, however dictatorship and authoritarianism are evil and cannot sustain development and prosperity over long cycles. At some moment in time the Chinese government won’t be able to provide enough economic growth and prosperity, and the legitimacy of the Chinese communist leadership will called into question.

India is somewhat what I had in mind – democratic institutional development coupled with economic growth. The Indian government is strong, however it is fundamentally a democracy. Institution building should be aimed at protecting and promoting individual rights, while at the same allowing the functioning of a competitive market economy.

Free trade should be seriously considered as a means of ending poverty. Lifting trade barriers and allowing agricultural products and/or manufactured goods to enter protected European and American markets should be considered and promoted as a means of ending poverty.

George

Comment on Ending Poverty. What Approach Works Best. by Corina Murafa

Corina Murafa — Fri, 26 Feb 2010 07:39:56 +0000

@nanne… interesting article. not necessarily counterintuitive (you know the old line, no taxation without representation… it can go the other way around and act of course as a mechanism for government accountability)

@george… not so sure about the free trade part; also, look at countries that have taken a third way (one might say simply a circumvented one) like China, Vietnam, India and they’ve broken out of the cycle of poverty. and institutional building (which you propose as a solution) is a state-driven solution, that you have to admit. anyhow though, you’re almost approaching the “it’s so complicated we don’t really know what to do” with selecting as much as 3 very strong options in and by themselves. thanks for your comment, though! an engaging conversation!

Comment on Ending Poverty. What Approach Works Best. by george

george — Sun, 21 Feb 2010 16:56:53 +0000

Hello Corina,

Personally I believe that options 2, 3 and 4 are the solutions that are most likely to reduce poverty. The historic record shows that without market economy, free trade and entrepreneurship there is no real sustained development and improvement in living conditions. The West did not overtook economically Asia at the dawn of modernity because it received aid of some sort from other parts of the world, but because it developed market economies and political and social institutions to sustain growth. I know it is rather difficult to speak today of free markets as state intervention is on the rise again, but the historic record speaks for itself. However I am not proposing simply copying and pasting institutions and free markets – I am in favor of developing this type of institutions according to local conditions and norms. If we speak of aid – one should concentrate on private donations and initiatives. State aid is politically motivated and will target those areas of the recipient’s economy that is of interest to the donor and has political conditions attached.

George

Comment on Ending Poverty. What Approach Works Best. by nanne

nanne — Sun, 21 Feb 2010 12:50:59 +0000

I'm somewhat on the institutions side -- but I think that the geographical setting is also ignored too much. I took part in a seminar (taking part was more like listening in my case) by Dan Bromley at the HU last year where he forwarded that thesis. Bromley counterintuitively argues that income taxes are one of the keys to development. It might cause more confusion but I highly recommend reading his analysis (.pdf).

Comment on Ending Poverty. What Approach Works Best. by Corina Murafa

Corina Murafa — Sun, 21 Feb 2010 12:30:30 +0000

@gabi there are ups and downs for all of these choices. no 2 for instance involves a problem of scaling up your results, making them sustainable, building local capacity and ultimately strengthening the political system. if you only work locally, how about corrupt leaders. on the building institutions (option 4)… how do you that? normally, you do that by tying them to aid (i.e. we give you money if you oust corruption and the next edition of the WB good governance index indicates you’ve improved your governance). how do you build those institutions actually? and most importantly, how do you do it as “westerners” (isn’t that again some paternalistic approach that disregards “third ways” developing countries might take)… anywhow, thanks for the comment! the debate is fascinating

Comment on Ending Poverty. What Approach Works Best. by Gabi

Gabi — Sun, 21 Feb 2010 08:49:24 +0000

I’d go with number 2 and number 4. It’s not “do it all” and it’s not one solution either. Number 2 goes after the saying “Teach them how to fish, instead of giving them the fish” and number 4 should create a stable environment for the small businesses to develop.

It cannot be easy, but I think it’s possible.

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