The End of Poverty - Jefferey Sachs - Why Some Countries Fail to Thrive Flashcards
Describe the poverty trap.
In cases of extreme poverty, often times the per capita produced value per year is barely enough to keep an individual alive, and so no funds can be kept as savings.
In this case, the human capital is low due to a diseased and illiterate population. Natural capital is often depleted as the natural resources are used up and not replenished. Cultural capital is often low as well when generators, paved roads, trucks, and proper irrigation (Etc.) are not available.
Describe the issue of geography.
Note: Geographic determinism can be overcome
Many poor countries are remote, landlocked, and unable to access navigable rivers or coastlines.
Climate and endemic diseases also play a huge role in the feasibility of agricultural productivity (Whether it be indigenous crop yields, animal yields, or regional diseases).
Describe the fiscal trap.
Debt overhang, lack of taxable wealth, and corrupt officials are all barriers to government services such as roads, health care, power grids, and ports.
Government failure to support infrastructures, private business, and public safety will result in lack of growth.
Describe some cultural barriers.
Cultural influences may inhibit the abilities of women and certain ethnic or religious subpopulations. These inhibitions often keep birth rates high (Halting demographic transition) and remove large portions of the population from the labor force.
Describe geopolitical barriers.
Trade barriers that halt international relations stifle a poor country’s ability to grow.
Describe the plight of innovation.
There is very little investment or market for innovation in poor countries as innovation requires capital and new products will cost savings that the extreme poor do not have.
Describe the demographic trap.
Families in poor countries continue to have children they cannot afford. They are stuck in the first and second stages of demographic transition.
Most developed countries are at replacement level fertility rates.
What seems to be the main determinants of economic growth in poor countries?
Food productivity and fertilizer usage
What is the main effect of the poverty trap?
Rural farmers increase in population size, thus decreasing overall per capita crop yields. This increasing population creates a demand for more food and shelter, and thus savings and natural resources diminish even more rapidly.
Do the wealthier nations need to completely fund the growth of the poorer nations?
No, but they should help the poorer countries gain a foothold on the ladder so that they can achieve demographic transition (Falling fertility rates and smaller families) and market growth.
This growth will often times start through investments in fertilizer, irrigation, agricultural technology, and social equality for women.
