Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Production for use wikipedia , lookup
Fiscal multiplier wikipedia , lookup
Steady-state economy wikipedia , lookup
International monetary systems wikipedia , lookup
Economic calculation problem wikipedia , lookup
Washington Consensus wikipedia , lookup
Protectionism wikipedia , lookup
Economic democracy wikipedia , lookup
Poverty Reduction and Ecological Resilience through Genuine Development Jon D. Erickson Rubenstein School of Environment & Natural Resources Gund Institute for Ecological Economics University of Vermont, Burlington, Vermont USA [email protected] • www.uvm.edu/~jdericks/ Poverty Reduction and Ecological Resilience through Genuine Development • • • • • Legacy of the Washington Consensus Income Convergence or Cumulative Causation Genuine Development Alternative Strategies toward Genuine Development Implications on Retooling Macroeconomic Policy Legacy of the Washington Consensus • Bretton Woods mission drift GENERAL AGREEMENT ON TARIFFS AND TRADE Harry Dexter White and John Maynard Keynes Legacy of the Washington Consensus • Consensus of IMF, World Bank, and US Treasury – Fiscal Austerity – Privatization – Market Liberalization • Application of the Consensus – Top-down – Industrial / resource extraction oriented – Export-led • Theory behind the Consensus National growth would lead to trickle down development Income Convergence or Cumulative Causation • Kaldor-Kuznets-Solow consensus – Marginal propensity to save of the wealthy Inequality lead to growth Income gap between rich and poor Greater incentives Greater labor productivity – Growth-Inequality development paths Evidence from US and UK Growth path eventually leads to greater equality – Income convergence between nations due to decreasing marginal returns http://www.cr1.dircon.co.uk/TB/2/dreturns.htm Income Convergence or Cumulative Causation • Cumulative Causation – Possibility of increasing returns (Smith, Marx, Young, Myrdal) Uneven development Future development depends more on past investment (path dependency) In the normal case a change does not call forth countervailing changes but, instead, supporting changes, which move the system in the same direction as the first change, but much further. Because of such circular causation a social process tends to become cumulative and often to gather speed at an accelerating rate. (Myrdal, 1957, p. 13) Income Convergence or Cumulative Causation • Theoretical critique – Nelson (1956): Low-level equilibrium traps – Arrow (1962): Learning by doing – Romer (1986): Growth rates as function of attained level of development – Arthur (1999): Technology lock-ins – Galor (1996) and Quah (1996): Growth clubs Income Convergence or Cumulative Causation • Empirical critique – Persson and Tabellini (1994): Inequality as impediment to growth – Benabou (1996): Inequality stunts national growth rates – Aghion et al. (1999): Redistribution towards equity would increase domestic investment and stimulate growth – Skott and Auerbach (1995): Low income countries not catching up. – Bourgninon and Morrison (2002): Income divergence at best decelerated over last 50 years. Global gini has increased by 30%. Income Convergence or Cumulative Causation • Empirical critique – Barro (2000): Poor countries have had lower growth rates. Exceptions due to human capital investment. – Easterly and Levine (1997): Low income countries have similar characteristics such as low levels of schooling, political instability, and insufficient infrastructure. Growth as Cumulative Causation Population 20% Income 82.7% 1950 1992 20% 20% 11.7% Over 5x increase in global output Nearly 12x increase in world trade2.3% 1950 – Haves 30x over the Have Nots 20% 1.9% 1989 – Haves 60x 20% over the Have Nots 1.4% US UK Indices of ISEW 140 140 90 90 40 1940 40 1940 1960 1980 2000 German y (Index of Sustainable Economic Welfare) 1960 1980 2000 and GDP (1970 = 100) Austri a Chile 240 140 140 90 90 40 1940 40 1940 1960 1980 2000 Netherland s 140 90 90 1960 1980 140 90 1960 1980 2000 Swede n 140 40 1940 190 2000 40 1940 1960 1980 2000 40 1940 1960 1980 2000 Genuine Development Alternative • Genuine Development Indicators – Genuine Progress Indicator – Human Development Index – UN Millennium development goals: 1. 2. 3. 4. 5. 6. 7. 8. Eradicate extreme poverty and hunger Achieve universal primary education Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, malaria and other diseases Ensure environmental sustainability Develop a global partnership for development. Genuine Development Alternative Genuine Development Alternative Genuine Development Alternative Genuine Development Alternative Genuine Development Alternative Genuine Development Alternative • Ecological economic capital assets approach nt Factor services Goods Household Firms (production Government )G Financial markets al consumptio Other countr ies Genuine Development Alternative • Ecological economic capital assets approach Genuine Development Alternative • Ecological economic capital assets approach Genuine Development Alternative • Ecological economic capital assets approach “Full W orld” Model of the Ecological Economic System positive impacts on human capital capacity being, doing, relating Ecological services/ amenities Complex property rights regimes having, being doing, relating - having, - being Restoration, Conservation Education, training, research. Institutional rules, norms, etc. Building Natural Capital Human Capital SocialCapital Manufactured Capital Limited Substitutability Between Capital Forms Individual Common Public Solar Energy Well Being (Individual and Community) having Consumption (based on changing, adapting preferences) Wastes Economic GNP Production Process Goods and Services Evolving Cultural Norms and Policy Investment (decisions about, taxes community spending, education, science and technology policy, etc., based on complex property rights regimes) negative impacts on all forms of capital Materially closed earth system Waste heat Genuine Development Alternative • Genuine Savings Genuine Development Alternative • Natural Resource Curse Sachs and Warner, 2001 Strategies toward Genuine Development • Reversing the resource curse through investing royalties in directed poverty eradication • Investing in natural capital through payments for ecosystem services • Capturing the carbon dividend • Human and social capital investment • National debt for international services • Regional economic development Retooling Macroeconomic Policy • Fiscal Policies that invest broadly in natural, social, human, and built capital. • Monetary Policies that expand the role of local currency, increase internal velocity of money and plug the leaks of regional economies, favor domestic investment opportunities for long-term economic capacity. • Trade Policies that balance self-sufficiency and sectoral diversity with comparative advantage and export opportunities, and restrict capital mobility so that comparative advantages remain.