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Poverty and Development
Addressing Poverty and Inequality
Socialism and Communism
-Redistribution of assets, equality, state control
State sheltered industrialization, export-led growth
-Subsidies, tariffs, private property, but large role of the state
Washington Consensus
-Liberalize: open trade, remove inefficient state support,
remove controls on capital flows, cut the size of the state,
privatize, restructure
Keynesian State
-Social safety nets
Development Assistance
Official Development
Assistance (ODA)
–Bilateral
–Multilateral: through
international organizations
 Private foundations and NGOs:
– Ted Turner, Bill Gates Foundation, Hewlett Packard Foundation,
Conservation International
Meet the Fakers?
2000 ODA as Percent of GDP
Million Promises to Keep?
World Bank
 Established by Bretton Woods Agreement (1944)
 Dominated by largest donor countries
 Assistance for restructuring and development
– Infrastructure
– Structural Adjustment Loans
– Education, environment
 Type of Assistance
– Loans
– Grants
 Increasingly intrusive policy conditionality
World Bank Project
 Sardar Sarovar Dam,
Narmada River, India
World Bank: Total Lending to Bulgaria
 Financial and Enterprise Sector
Adjustment Loan (FESAL)
 Adjustment agriculture: $125mn
 Market development: $30mn
 Education: $14mn
 Access to healthcare: $26
 Social protection: $24
United Nations Development
Programs (UNDP)
 Core UN institution
 Controlled by the UN General Assembly
 Less resources compared to WB, IMF
 Technical assistance for development
– Capacity building
– Limited technology transfer
 The UN Human Development Index (HDI)
– Measures well being
– Alternative to Gross Domestic Product (GDP)
Paradigms of Development
 Market Driven Growth
– Objective: increase Gross Domestic Product (GDP)
– Means: free market, get prices right, liberalize, modernize, new
technology; more supply of food;
– Example: Green Revolution
 Sustainable Development
– Focus on human well-being, both material and non-material
– Means: community control of resources; empowerment of
women, marginalized people, education, access to finances;
entitlement and fairness
– Example: State of Kerala, India
Practical Solutions?
Reform Domestic Institutions
 Corruption
 Judicial system
 Social safety nets
 Human capital
 Social capital
 Encourage savings and access to credit
Jubilee 2000
Jubilee 2000: “A Coalition that brought
together unlikely alliances like Puff
Daddy and the Pope; Jesse Helms and
Bono; the Sisters of the Sacred Heart
and the Spice Girls.”
Address Health Factors
The Malaria pandemic
-30mn.cases/year
-1mn. deaths
-$12bn in lost GDP
-90% in Africa
The Millennium Development Goals
The Millennium Development Goals
Initiative of Kofi Annan and UN Agencies
By 2015:
 1. Reduce by half extreme poverty and hunger
 2. Achieve universal primary education
 3. Eliminate gender inequality in primary and secondary
education
 4. Reduce by 2/3 child mortality under 5 years of age
 5. Reduce by ¾ ratio of women dying in childbirth maternal
 6. Halt, begin to reverse spared of HIV/AIDS, malaria
 7. Ensure environmental sustainability
 8. Develop a global partnership for development