Banerjee and Duflo (2007) - The Economic Lives of the Poor Flashcards
Living arrangements of the poor
1) Families are large, 6-12 members.
Easier to navigate cost of living (eg housing) with more
2) Multiple children (the poor of the world are young
How the poor spend their money
1) Food: 56-78%
2) Alcohol and tobacco: 4-8%
3) Festivals, weddings, funerals: median 10%
4) Movies, theaters etc: less than 1%
Investment in education
1) Around 2% money invested in education
2) Not resulting from an un-enrolment
3) Attendance is free in public schools - yet sometimes dysfunctional stemming from teacher’s absences, poor quality etc leading to preference in private schools (similar to Olopade argument about the hidden data of numbers from MDG improvement)
8 ways the poor earn money
1) Selling food on the street
2) Entrepeneurship
3) Agriculture, farming
4) Juggling several occupations
5) Daily laborer (most common. eg teaching, sewing, embroidery, animal rearing, gathering fuel)
Markets and the economic environments of the poor
1) few poor households get loans from formal lending sources such as banks - rather from kin, friends, moneylenders
2) Lending to the poor is difficult as they are poor.. the profits from transactions do not cover the costs of monitoring
3) challenge to find safe ways to save money and hard to resist temptation of spending money
4) little access to formal insurance. “informal insurance relies on the fortunate to take care of those less favoured”. governments usually fail to do this.
5) many por people have access to or own land, but down have a title (paper) to it = hard to sell or mortgage
3 reasons why the poor do not earn more money
1) migration to work
2) Lack of specialisation - little chance of learning their job the best and not a requirement of specialisation in many jobs
3) Businesses operates on small scales, often non-paid staff, operated by 1-3 people, lack or not much access to vehicles = scale too small for efficiency
Infrastructure and the economic environment of the poor
1) Infrastructure varies immensely to no access in some countries to full in others (ranging from access to water, electricity, health care etc)
2) absence rate of teachers (19%) and health workers (35% are high
3) low quality teaching = inefficient learning.
4) private school teachers are present, but less qualified. same patterns in health care.
Critique 1: Formality bias
Olopade’s concept regarding how Western economies have a formality bias in terms of what is considered “legit” ways of earning money. Many of the poor work in the informal / grey economy which is really hard to account for in a solely quantitative-based research paper
Critique 2: Uni-disciplinary perspective / reification
Wolf and Wallerstein’ similar arguments - that the separation of disciplines into separate boxes has led to a reification of reality - these “boxes” do not exist, but we treat them like do, hence make them “bouned”, “static” and do not open them for conversations. This is specifically clear here as it takes a almost strictly economic perspective, without accounting for history (what historical reasons led these people to poverty and some not?), political science (the political and ideological agenda which created poverty and sustains it today), sociology/anthropology (what are the local differences between the poor?) Without this conversation, the article simply looks at the present as a static, bounded whole and asks the questions “What do these poor people or their governments do wrong so that they remain in poverty?” This represents poor people as if they have always been poor and they placed themselves in that situation. It also, like Wallerstein claims, leads to an inability in making long term predictions about phenomena. This is evidenced both in the lack of context and solutions provided in the paper. Lack of employment of development narratives influence on poverty and ideology
Critique 3: Ethnocentrism
Comparative to European / Western formal economies, just that dollar is used as the comparative monetary thingy, does not consider that economy looks different, suggests that saving and accumulating money is the best etc.
Critique 4 and 5 and 6
1) Toooo general to observe poverty as a phenomena across such big areas
2) Where do we go from here?
3)We will never even be in that situation and here we are supposed to learn about it in this way..,
