Post 6 -Banerjee & Duflo

Sachs and Easterly make very valid points for the topic of ending poverty. Sachs feels that we should give the poor aid for specific goals to be met because corruption, as he sees it, is a poverty trap. These specific goals can be monitored easily with programs. Sachs ultimately believes that foreign aid and monitoring is a way out of extreme poverty. For example, regarding political institutions, Sachs feels that poor institutions are a disease to poor countries. By focusing on concrete, measurable programs and making people educated a virtuous circle will form, where good institutions emerge. Easterly on the other hand, feels that the West should stay out of developing countries and let them figure it out on their own. Regarding institutions, he feels that we cannot judge whether a countries political institutions are good or badjs. Both make very good points, but it is hard to take just one side. On one hand, I feel that foreign aid to these countries with the right monitoring programs really does make a difference in these people’s lives. Programs are successful, fields like agriculture, and bring about change, not drastic change, but steps in the right direction. But, on the other hand, I can see why the West should stay out of other countries’ affairs. Always giving developing countries aid is not the way to ‘fix’ them. All aid does is make those countries dependent and encourages the leadership to stay in poverty, with minuscule improvements every time to stay above the receiving line. Every time the West intervenes in a country that we deem ‘in poverty’ matters are only made worse. For example, David Karanja, a former Kenyan member of parliamweent: “Foreign aid has done more harm to Africa than we care to admit. It has led to a situation where Africa has failed to set its own pace and direction of development free of external interference. Today, Africa’s development plans are drawn thousands of miles away in the corridors of the IMF and World Bank. What is sad is that the IMF and World Bank experts who draw these development plans are people completely out of touch with the local African reality.” My stance on Sachs and Easterly is in the middle, one side cannot be taken on an issue like poverty.

Banerjee and Duflo address issues regarding food security, healthcare, financial institutions, and others throughout this book. They touch on how the poor tend to spend their extra money on more expensive/tastier foods, rather than saving their money and buying more food. They talk about how medical facilities and healthcare providers are not very reliable, so people are not as inclined to seek help from public institutions and providers. They also address the topic of banks in developing countries and how that paved the way for microcredits, which are a cheaper alternative in terms of loans. Banerjee and Duflo sufficiently covered these issues. They provided testimonies from patrons in poverty that help explain why the poor do what they do and how they think. This gives better insight for Westerners that believe that saving money and going to health clinics are common knowledge that everyone should know/do. The authors posed ideas and measures that could be taken to gain a step in the right direction, but also left it up to the reader to decide for themselves and form an opinion. Policy measures that seem to work are transparency, with regards to politics. For example they talked about the Ugandan headmasters were talking nearly all of the money allocated to schools. When a media outlet exposed them, then they started actually giving the money to schools. Global measures are not really taken sufficiently. Of course there are NGO groups that help when and wherever they can, but that is simply not enough to bring considerate amount of attention to these countries.

Resources:

https://www.cato.org/publications/economic-development-bulletin/african-perspectives-aid-foreign-assistance-will-not-pull-africa-out-poverty

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