Sach’s and Malaney’s article discussing the economic and social burden of malaria brought several factors about malaria that I was unaware of. The number of clinical cases the paper sites every year (300-500 million) was astounding; however, given the strength of the disease and its predominant presence in underdeveloped countries that lack the same level of resources as others, the deaths (1-3 million) in proportion to diagnoses struck me to be low. That said, 1-3 million deaths, mostly of children, is astronomical and incredibly sad. Additionally, I found the notion that adults generally develop partial immunity to the disease to be interesting, and highlighted the importance of children in tropic and sub-tropic regions that are at high risk of contracting malaria to have access to adequate methods of malaria prevention and treatment. The main problem I found in the article was the connection between poverty and malaria, and how the disease may prohibit developing countries from experiencing economic growth in may ways, including by making these regions potentially less attractive for investment, given the high risk of the labor force due to risk of contracting malaria.
The nobel prize lecture had many interested components that tied back to previous readings in this class. First, the author’s point that most economists fail to understand that “poor people are no less concerned about improving their lot and that of their children than rich people are.” This related to the discussion of how the poor spend their money in “The Economic Lives of the Poor.” As we looked at how the poor spend their money: on food, usually not maximizing their calories, on alcohol and tobacco, entertainment, and festivals, we see spending patterns may be very similar to those of wealthier households. As the lecture described that there are similarities between the spending behaviors of the rich and poor, we can look at general human behavior as the mechanisms driving spending rather than individual’s income levels.
As Ali previously mentioned, the most important piece that I took out of the Nobel Prize lecture was that “poor people are no less concerned about improving their lot and that of their children than rich people are.” Many economists fail to realize this, and they assume that the standard economic theory is inadequate for understanding low income countries. Most economists may presume that we need a separate economic theory. However, what they fail to realize is that early economists already dealt with the conditions of low income countries. Classical economics was developed when most people in Western Europe were very poor, and also were subsistence farmers – similar to many low-income countries today. The historical significance was surprising to me as I had not previously thought about the conditions of higher income countries before they experienced economic growth. This confuses me a bit though. If economic theories were being formulated at a time when many people were low income, then why do economists today think that we need a separate economic theory for the poor? It seems contradictory. It may be that they are unaware of the history as I was, but the historical significance seems like a big thing to overlook. The “Economic and Social Burden of Malaria” hit on some key points that we discussed in class today. The most interesting points to me though were things that we had discussed in previous classes. For example, evidence has shown that areas with malaria epidemic experience less foreign direct investment. From Prof. Silwal’s talk, we discussed how important foreign direct investment is for developing countries. Because foreign investors might be scared to invest in the country as a result of malaria, the country may not be able to sustain long-term growth. Tourism also decreases when there is more malaria as people are afraid of contradicting the disease. All these are negative costs that the country bears as a result of the burden of the disease beyond just country borders. Furthermore, not only are there international costs to malaria, but there are many domestic costs as well ranging from loss to labor force, loss to human capital, potential loss in savings if people don't account for the future, etc. which all could have even more detrimental effects on the economy. This article highlighted the fact that malaria should not only be a health concern, but also an economic concern as well. The link between health and economic growth is clearly pronounced in this article, and it relates back to what we discussed in class today.
As someone interested in health, economics, and poverty, I found the Sachs and Malaney article on malaria and poverty to be particularly compelling. It reminded me a lot of our discussion in class today regarding why fertility/death rates may be so high in underdeveloped nations - when the probability of death is so high in a region due to a disease, it makes complete sense why families may have more children. Traditionally these high rates may eventually lead to development but that assumes that the health technology from human capital will be produced in order to cause the population shift. However, if people keep dying because of a persistent disease, the economic theory may not hold and development may not occur.
The article simply reaffirmed a concept that we already know - poverty cannot be boiled down to one cause. All of the issues surrounding poverty - health, education, agriculture, etc. are so intertwined with each other. I may be biased by my propensity for health issues, but I can't help but think that tackling the health problem of malaria should be the first course of action. Without proper health, it is impossible to fulfill the other human capabilities of life. Without fulfilling the other human capabilities of life, development will never occur.
It's clear that this article is trying to motivate investors to give more money to help eradicate malaria. Jeffrey Sachs has a huge reputation for being a proponent of foreign aid. Sachs continually argues that a "big push" of aid will help the problem. However, his critics say that there has been so much aid being given already and the problem is still astounding, so what is the point? With such astounding numbers of people, children in particular (1-3 million per year) dying, it is depressing that more isn't being done, especially when there is so much empirical economic, medical, and psychological evidence that there are simple ways to decrease the rates and that the disease has numerous and comprehensive negative externalities. I'm very curious to hear the economic argument against sending aid for malaria that some of Sachs' critics would offer.
I found Sach's and Malaney's article on the burden of malaria very fascinating. As other students have alluded to, the numbers in the article just absolutely astounded me. The fact that there are "300 to 500 million clinical cases every year, and between one and three million deaths, mostly of children" attributed to malaria is extremely devastating. Another statistic that stood out to me was the fact that "every 40 seconds a child dies of malaria, resulting in a daily loss of more than 2,000 young lives worldwide." These two statistics emphasize just how devastating a disease malaria truly is.
I also found the section on the relationship between poverty and malaria very interesting. Obviously, there is an issue of endogeneity between the two variables. Does malaria lead to poverty or does poverty lead to malaria? As the article suggests, perhaps both cases are have some truth. However, to me, the theory that poverty leads to more malaria makes the most sense. In poor countries, people are unable to pay for the necessary prevention methods thus increasing the chance of malaria transmission. Despite this sound theory, evidence suggests that economic development is not enough. I found it interesting and somewhat confusing that even wealthy countries (such as Oman and the UAE) have been unable to eliminate malaria.
In Theodore Schultz’s Nobel Prize Lecture, it is easy for society to critique the decision-making of the poor, for most of their choices do not reflect an internal need nor determination to improve their impoverished state and standard of living. Theodore Schultz reiterates this notion by saying, “What many economists fail to understand is that poor people are no less concerned about improving their lot and that of their children than rich people are. (Schultz). Many of us will continue to ask the question, why? Why do the poor choose to misallocate their resources, instead of making choices that will enhance their well-being? It is difficult for an outsider to not judge or ridicule irrational behavior. However, similar to our class discussion about the “The Economic Lives of the Poor,” it is important to remember that society, including you and I, makes choices that might not be deemed as rational or reasonable. It is important to remember how external pressures can influence or jeopardize cognitive abilities, which will lead to choices that might not enhance one’s standard of living.
Therefore, investments in human capital can be very powerful, as this can create a population of quality. In Tuesday’s class, we talked about how it can be more beneficial to have a population of quality, rather than quantity. Investments in health and education will enhance the productivity of society, which will lead to greater economic returns, for “The value of additional human capital depends on the additional wellbeing that human beings derive from it” (Schultz). Therefore, productive investments in human capital will positively influence the lives of the poor, an important step to create economic prosperity and reduce poverty.
One of the things that I found interesting from the Sachs article on Malaria was the affect that the disease has on the savings rate. I found this to be especially fitting given our recent study of the solow growth model and had never really thought about the impact that a single disease could have on the savings rate. It makes complete sense that the disease would have a directly negative impact on the human capital of a country because it limits peoples schooling but I had never thought that a disease could limit the physical capital a country has. As sachs says, "The evidence suggests that malaria decreases household savings as families areforced to hire labour to compensate for days lost to morbidity." This would shift the SY curve down and result in a lower level of capital per capita which I would imagine only intensifies the problem and creates a sort of never ending cycle.
While not a focal point, I felt the discussion on longer lifespans to be the most interesting part of the paper. It related back to his larger point on the necessity to increase the quality of human agents, but in a way I had previously not fully appreciated. Shultz claims under the “social-economic view” that “man has the ability and intelligence to lessen his dependence on cropland, or other traditional agriculture,” but he is only able to do so through cultivating that “ability and intelligence.” In society, one can only cultivate these traits by investing in them. Similar though to an explanation in prior readings that high death rates in childbirth explained the under education of women, shorter lifespans reduce the willingness to invest in children’s future. By increasing lifespans then we not only receive the “satisfaction that people derive from longer life” but we gain an increasingly educated and efficient workforce. Each year of life would in theory increase the marginal benefit of education. As we mentioned in class however, if we cannot increase the quality of these later years the economic benefit of education and the individual will remain stagnant. (for each additional year the lifespan increases)
As a chemical engineering major who is interested in going to graduate school for regenerative medicine and tissue engineering, the introduction grasped my attention right away with the mention of the genetic polymorphism sickle cell trait and its relationship with malaria. Economically speaking, I think this development of sickle cell trait in the human genome and its corresponding fatalities can also be considered a consequence of malaria. Not only this but the method of transmission of malaria and its relationship with temperature was also very interesting. Previously, I was not aware of the mechanism of malaria transfer, but the introduction is very thorough in prepping the reader with background information.
Now delving more into the economic side of things, I found the annual GDP difference between malarious countries those without intensive malaria to be quite astonishing. I feel like it's an accepted conjecture for the most part that malaria has a detrimental effect on the economy, however, putting actual numbers to the statement really puts it in perspective. Also, the 'quanity-quality' trade off of children was something I hadn't really considered (by being raising the fertility rate due to the infant mortality rate, each child gets less invested in it).
Sach’s and Malaney’s article made the costs of malaria abundantly clear, and they are certainly staggering. I had only considered the the public and private health costs and lost income associated with malaria, as do many economists who study the effects of disease burden. However, changes in household behavior and macroeconomic effects should be considered as well when weighing the costs and benefits of malaria prevention programs. Malaria is more debilitating than most other parasitic diseases in Africa, with the Plasmodium falciparum malaria species causing fever spikes above 104 degrees every 24 hours. While this may affect children more than healthy adults with immunity, adults lose work time as well by spending time with their sick children. Long term cerebral, kidney, and liver damage can also occur, potentially exacerbating other health conditions later in life. It is unsurprising that the risk of all-cause mortality fell significantly farther than malarial mortality with the use of mosquito nets, because even people who recover from malaria can suffer long-term organ damage. Additionally, while anyone can be infected with malaria, malaria disproportionately impacts the poor. I would agree with the authors’ assertion that there is bidirectional causation between malaria and poverty. Malaria is relatively treatable with antiparasitic drugs; however, they must be taken on the correct schedule to prevent relapse, which is not always realistic for poor patients. Malaria parasites can live in liver cells undetected by the immune system for a long time, and complete disease eradication is necessary for treatment. One current prevention method being used in Africa is drug prophylaxis, where children in high-risk areas are given malaria drugs each month during the rainy season. These programs have been effective in reducing malaria prevalence and mortality and are relatively low-cost, but a concern is that they may increase the risk of drug resistance. The potential risks of malarial drug resistance must be weighed against the benefits of current disease reduction, with the hope that better drugs can be developed in the future.
Given the widespread health, economic, and social implications of malaria, it is shocking that only $100 million was spent per year on malaria prevention and treatment worldwide when this article was written. This is certainly an underallocation of funds, and governments should consider anti-malaria campaigns when attempting to improve economic growth and general development.
Upon reading Sachs and Malaney's article on the economic and social burden of malaria, the first thing that came is just the extreme magnitude of destruction one disease can have on a country. Maybe it came as a such aa surprise because malaria is nonexistent in the U.S. so we rarely hear about it hear. Obviously, the sheer number of deaths from malaria is horrific and needs to be addressed especially since majority of the deaths are from children, but the thing that particular stuck out to me was the economic consequences. Similar to what Jack said in his blog post, it shocked me that one disease could be such an extreme burden on economic growth, but after reading the article it makes complete sense. Especially considering the example of the mining company that put the largest foreign in Mozambique and how malaria continues to deter other such companies from providing investment. However, the question that still remains after reading the article is what the most logical step is to start properly fighting against malaria. In the end of the article it stated that current efforts to fight malaria were way below what organizations such as WHO suggested is necessary to help eliminate the disease. It almost reminds as the big push theory, in that there just needs to be one giant effort to fight malaria in sub-Saharan Africa, and that the economic growth will follow suit because of the improvements in human capital, productivity, savings rate, fertility rate and so much more. The justification for spending almost $4bn to fight malaria is there because of the unlimited number of economic benefits, but not to mention the number of health benefits. Where this money comes from will most likely have to be a combination of both public and private sectors, but there should be overwhelming support to help finance the fight against malaria.
I think it's important that the Sachs and Malaney article noted the need for funding. The article made it abundantly clear how detrimental malaria is for a nation's economy and for the health and well-being of those in that area. The topic of disease prevention made me think of Banerjee and Duflo's article about the economic lives of the poor and how the poor would react in this situation. While then I said that education is arguably the most important factor in development, I now would change that response. In some instances, that may still be the case. However, when an area is so crippled by a disease like malaria, health definitely trumps education. In class we were discussing how we were all surprised that these poor people were spending money on things like festivals when they didn't even have enough food to eat. Well, the developed countries need to take this into consideration when thinking about funding. With the evidence presented by Banerjee and Duflo, it seems unlikely that these poor people would devote any significant amount to disease prevention, not that they'd probably have a substantiative amount even if they tried. But like Professor Casey said in class the other day related to education, disease prevention would cost them now for only the potential of future gain. There are definitely private as well as social benefits to it, but that's not how these poor people are going to choose to allocate their funds when they don't even have enough to feed themselves. So it's important that the developing world find the funding to help these countries, as their outlook is bleak if we do not.
The discussion about achievement in population quality in Theodore Schultz’s Nobel Prize Lecture was the most interesting part to me. I think his approach to population quality as a scarce resource helps readers understand the economic importance of population quality. He then explains that when returns exceed the costs, population quality will increase. I think that this idea further validates our discussion on Tuesday. Furthermore, he addresses the importance of increasing human capital in a population. However, he explains that it is not just the additional units of human capital, but how valuable it really is. I immediately compared this idea to Amartya Sen’s Capability Approach. I think these ideas go hand in hand. Sen stresses the idea that it did not matter that the individual had opportunities, but what he did with those opportunities is what matters. Schultz’s idea plays off Sen’s approach. Schultz does not think that the presence of additional human capital is what will bring about better population quality. Instead, it is the additional human welfare that individuals gain from having more human capital. If human capital is entirely capitalized by an individual, there will be increases in productivity and entrepreneurial abilities for an economy.
Schultz’s Nobel speech almost immediately reminded me of Banerjee + Duflo’s “Economic Lives of the Poor.” Despite almost thirty years between the two papers, they have strikingly similar motivations; they both seek to offer some deeper insight on the economic constraints and challenges faced by the poor. Despite three decades of improvements in standards of living and other components of quality of life, the same problems appear in both papers like issues of land ownership, agriculture, and the need for greater investment in health and education. I’m not sure if this speaks to the sheer permanence of these obstacles to development and our ability to focus our attention on increasingly specific facets of these issues as technology progresses (maybe both).
One really interesting difference between the papers, however, is their respective discussion of entrepreneurs. Schultz presents entrepreneurs in a more capable sense. He writes that they are “calculating economic agents” and an “essential human resource.” In his critique of some trends in economic thinking, he says that farmers are “fine-tuning entrepreneurs, tuning so subtly that many experts fail to recognize how efficient they are.” Schultz seems to see the entrepreneurial spirit as a skill to be fostered, a vital component of human capital that can bring increasing returns in time. Banerjee + Duflo present entrepreneurship in a more cynical, but perhaps more realistic light, as a less-favorable alternative to wage-earning. The entrepreneurship they describe seems more similar to hawking and may be the only option for those with few skills and limited access to capital. They stress that these “businesses” are extremely small and therefore remarkably inefficient (lacking economies of scale), and they do not create new jobs for others in the economy. This type of entrepreneurship, despite its good intentions, “reinforces the proliferation of petty entrepreneurs” and may ultimately contribute to limiting the potential for economic growth.
The Sachs and Malaney paper on economic and social burden of malaria is very interesting. It’s hard to imagine the dilemma of malaria in the United States since this problem has been solved and climate is drastically different than the tropics where malaria is heavily concentrated. With modern technology and modern medicine, I was amazed to see that there are still about 500 million clinical cases every year and about 2,000 children die daily from malaria. This can help explain why developing countries located in tropic regions produce so many children due to the fear that some of them may perish from malaria. This concept spills over with what we discussed in class on Tuesday on how developed countries don’t truly understand choices that poor people make in developing countries.
“The Econoimcs of Being Poor” paper also mentions the idea that wealthy people don’t understand the behavior of poor people, and this type of discussion does not exclude economists either. I feel this concept only complicates the process and/or transformation of a developing country into a developed country. Since most of the time, economists from wealthy countries are the ones attempting to come up with models to help initiate economic growth and development in these poor countries. Another point that is mentioned in this paper that I thought was interesting was that land is overrated. It was discussed that in different regions throughout poor countries, people are not any better off if they have good farming land compared to people who live on non-fertile land. Also, discussed in class on Tuesday, that the quality of the labor force is more important than the land, and it’s still underrated in today’s world.
I found the insight review article on “The economic and social burden of malaria” very informative. The correlation between poverty and malaria seem to feed off each other as the causality runs both ways. The direct and indirect cost of malaria is severe. From disrupting household income to disrupting things on the macro level such as trade, FDI, GNP, and tourism. As these cost are almost impossible to fully measure they have dramatic social consequences. Such as increase fertility rates, which can lead to divestment in women’s education and foster gender inequality. Malaria and other diseases constrain the economies and the lives it effects. In order to improve the conditions, economies affected by malaria should be stimulated and a large focus should be placed on health and education. I was shocked to read that the programs to end malaria are underfunded, as the benefits from ending malaria would outweigh the cost when one considers the spillover effects.
Briefly the article mentioned malaria as a colonization barrier as colonizers were restricted in their movement into Africa due to the disease. Industrialization and improvements in technology gave colonizers in the 19th century the ability to penetrate Africa under the veil of imperialism. Malaria as a buffer ultimately succumbed to improvements in technology and health. Yet for hundreds of years the access to these improvements have been neglected in regions that colonizers needed them the most.
Before reading the article on malaria, I had no idea of the extent the disease had on sub-Saharan African countries. When thinking about the effect of malaria in relation to the Solow model, it makes sense that malaria would affect not only the savings rate, but also the amount of capital per capita. Sach’s and Malaney state that high population growth rates are related to places with a high transmission rate of malaria. With such a high population growth rate, any kind of economic growth would be unsustainable. I noticed an overlap of ideas between Schultz’s lecture and Sach’s and Malaney’s piece on malaria. Schultz discusses the importance of investing in healthcare and education in order to improve the quality of people and increase economic growth. With a disease like malaria, economic growth is nearly impossible when significant investments are not made towards eradicating the disease – as it effects not only the health of the population, but the choices that they must make to survive. Like we discussed in class, growth is a function of education and health, where education is conditional on health. We see that in the study that education is put the side, especially for girls, because of the effect of malaria. It is incredible the way one problem can affect the whole economic system – how health has an all-encompassing effect. I’m curious why there have only been limited investments made in an effort to eradicate malaria, when it is clear that economic growth cannot happen in these countries while this disease prevails.
I'd like to home in on the portion of Schultz's speech that noted the reason "governments tend to introduce distortions that discriminate against agriculture is that internal politics generally favor the urban population at the expense of rural people." He goes on to presciently mention the occasional "green revolution," which he says briefly brings agriculture into relevance within the political-economic sphere. I wonder if today's "green revolution" is any different. There seems to be a genuine change in sentiment among middle and upper-middle class American consumers (I wonder if the same holds true for China) that traditional agricultural channels are not providing the same level of nutrition as locally-sourced products. There is significant alteration to fruits and vegetables in order to transport/store them in American grocery stores, and there seems to be a significant backlash against this (e.g. Whole Foods customers). Again, this could be a fad, but it's one that I'm certainly on board with and hope it brings newfound integrity to the U.S. governance of agriculture.
I found the Sachs article especially interesting because it is a strong collection of evidence that supports the environmental pathways to development as a pre-requisite for most other drivers of growth. In other words, it implicitly argues that the development of North America and Europe, while perhaps driven by institutional strength and historical accidents, had to be preceded by favorable climate conditions. He does not say that things like macroeconomic stability or democratic regimes do not help development, but he stresses that the environment (tropical climates) can lead to different diseases (malaria) that may results in poor economic and human outcomes (low levels of education, weak labor markets, higher fertility, lower FDI and trade, etc.). I found very interesting that they brought up how weak the current efforts to eradicate malaria are, in spite of all the human and economic losses. This point brings up a “Rawlsian” ethical argument about the duty of the rich countries (well-endowed in terms of climate) to help the poorer countries. More succinctly, if behind the “veil of ignorance”, a country does not know if it will have high or low malaria risk, then will he choose one in which the rich help the poor or not? If we agree that people (or countries) are more averse to the risk of being poor and without help than attracted to being rich without having to help, then we would agree to an international network of aid. Another strong argument for the rich helping the poor to eradicate malaria is that this article shows how much trade and FDI are forgone due to malaria. If we accept the standard economic theory that in the long run, free flow of goods, services and capital brings net gains for countries, then an attempt to eradicate malaria in poorer countries might actually benefit the richer countries in the long run.
Though I really liked reading Schultz’s insights about how quality of a population matters more than quantity, and the under appreciated importance of agriculture, I felt like most of it was review from things we talked about last class and classes before. That being said, I especially enjoyed reading the malaria article because 1) it changed my perspectives on the two-sided relationship between malaria and poverty and 2) it contained tons of information that was relevant to things we have already talked about. Before reading the article, I had always thought of high malaria incidence as something that was the product of high cases of poverty and that would decrease with economic growth. However, the article challenged that notion by discussing the negative economic effects of malaria. Like some of my peers have mentioned, I did not realize how drastic of an effect one single disease could have on economic growth and poverty. The article also discussed all kind of things (directly or indirectly) that we have talked about in this class and other econ classes, such as foreign direct investment, social vs private costs and benefits, risk-averse vs risk taker behavior, solow growth model, and women empowerment. It was really neat to see how all the things we have been learning are starting to tie in together as the class progresses. My brain was drawing all kinds of connections to past lectures and readings as I read the article.
I thoroughly enjoyed the delivery of the Schultz's "Economics of Being Poor". Would have been interesting to hear the lecture in person. He spends a good deal of the lecture calling out the mistakes of his peers, particularly the lack of investment in human capital in the rural, agricultural sector. This had we wondering how it ties into the idea of "urban-bias" associated with the Lewis two sector model. It seems that Shultz would called for investment towards improving the efficiency of the agricultural sector instead of siphoning away the labor. More capital is poured into the urban industrial sector, at the cost the agricultural sector. Investment in industry keeps grain prices low, at the expense of farmers. Aside from this, engraining the idea that the quality of people is of utmost importance really serves to put an emotional spin on the argument. It isn't just about improving efficiency and productivity in a neglected agricultural industry, it's about helping to alleviate the poverty that has come to be so closely associated it. Behind the production of the world's food is a person, little different than us, who isn't adequately equipped with the knowledge and skills to make the most of his livelihood.
Very much to echo what others have said, it is astounding to me the devastating impact that malaria can have on a country, and how I feel that most Americans are relatively unaware. That fact that 2,000 children die daily from malaria shows the potency of the disease and the negative effects it can have on a nation's health and growth. We have talked so much in class about the importance of no growth factors, such as health and education, and their extreme importance for development. One of the major indicators that undeveloped nations share in common is a relatively high mortality rates and lower life expectancies. Being able to eliminate malaria would most likely have a strong positive effect on a nation's development. As we have also studied in class, the majority of low-income nations are centered in the tropics or subtropical climate regions. Malaria is also most concentrated in the tropics in subtropics. It would be interesting to see who much of the climate region effect is a cause of malaria, or if other factors relating to the climate region (resources, weather) are the main reasons linking low-income and climate areas. Policy makers and economists spend a large amount of time studying how they can strengthen institutions or spark growth or boost investment. These are all widely held to be important aspects of development. I think this paper does a great job of opening up new explanations for why some countries have failed to develop, and looking at other less studied factors, like the environment, could give us insight into new policies that could better help development than traditional avenues.
The article written by Sachs and Malaney brought some very interesting facts to light. For example, the fact that a child dies every 40 seconds from malaria is astounding to me. This article also does an excellent job at predicting the social and private costs of malaria, and by extension, other deadly diseases. For example, students miss an average of 11% of school days a year in Kenya due to the disease. Additionally, malaria contributes to mental health problems in a country as well. The paper summarizes numerous other examples of malaria harming humans and human output, and it is truly awful to think of the damages this rampaging disease causes.
The Nobel lecture is very interesting, especially in juxtaposition with the Sachs and Malaney paper. Malaria is most prevalent in countries with lower production. Clearly, there is a link between these papers. Both articles emphasize that investment in health helps improve gdp. Therefore, in future policy decisions, it should be important to keep this in mind as we seek to improve not only economic growth, but also economic development.
Throughout the course of this class, I have frequently thought about the ways in which economics does not necessarily coincide with the various factors that are involved with the decision making of the average person, especially the poor. After taking a course on poverty at W&L, I have basic knowledge about the decision-making habits of the poor and it has always seemed to me that these habits and tendencies would be incredibly difficult to model and anticipate in economic terms. That being said, The Economics of Being Poor (in addition to The Economic Lives of the Poor) was a very insightful read. Schultz' statement that, "Economists are no exception, for they too find it difficult to comprehend the preferences and scarcity constraints that determine the choices that poor people make," was an indication that I have been on track in my thinking.
One of the most captivating parts of the speech was when Schultz addressed the tendency to favor urbanization at the expense of the vast rural population. Schultz noted that, "This discrimination against agriculture is rationalized on the grounds that agriculture is inherently backward and that its economic contribution is of little importance despite the occasional "green revolution." The internal politics of agriculture are vital to the welfare of an overwhelming majority of people worldwide and yet it is so neglected. It is my hope that through further understanding of the economics of low income countries, the governance of agriculture can improve so that the economic potential of agriculture can be realized and utilized.
The Sachs and Malaney article dives into areas of society and the economy that I was not aware malaria impacted. When I think about the impacts of malaria, I am narrow minded when I solely focus on the health and education ramifications when the disease has profound effects on so many other aspects of life and the economy. From the negative effects on trade, to travel, to investment domestically and foreign, and to physical and human capital, the evidence and research is remarkable in its impacts on malaria ridden countries. The one thing I noted when reading the paper was the catch 22 that exists between malaria and poverty. They are both so closely correlated that one cannot seem to benefit without improvements in the other. The poor are susceptible to contracting malaria with little expenditure on pesticides and health, and because they are located in rural climates where agriculture and malaria thrive. On the other hand, malaria "impedes economic growth" through constraining human and physical capital, trade, tourism, and investments. In attempting to cure this problem, we must look to tackle the disease itself while also allocating resources and help to those impoverished.
I found Schultz’ discussion on human capital and technology’s ability to increase resources interesting in his Nobel Prize lecture. This topic interested me, as I have grown up believing that the Earth had a fixed carrying capacity, and when we reached that population all hell would break loose. I enjoyed the example he provided that illustrated the effect technological development can have on production, as he states that in the US between 1932 and 1970, there was 33 million less acres of land, but the US produced 7.59 billion more bushels (3 times more). Also, I found it reassuring that increasing human capital might assist population reduction, as he points out that quality and quantity are substitutes. Therefore, by increasing technology, more resources can be produced, and by increasing human capital, there will be more resources per capita. Lastly, I thought Schultz’ nicely summarized man’s ability to manipulate the world he lives by using Alfred Marshall’s quote: “Knowledge is the most powerful engine of production; it enables us to subdue Nature and satisfy our wants."
Sach’s and Malaney’s article discussing the economic and social burden of malaria brought several factors about malaria that I was unaware of. The number of clinical cases the paper sites every year (300-500 million) was astounding; however, given the strength of the disease and its predominant presence in underdeveloped countries that lack the same level of resources as others, the deaths (1-3 million) in proportion to diagnoses struck me to be low. That said, 1-3 million deaths, mostly of children, is astronomical and incredibly sad. Additionally, I found the notion that adults generally develop partial immunity to the disease to be interesting, and highlighted the importance of children in tropic and sub-tropic regions that are at high risk of contracting malaria to have access to adequate methods of malaria prevention and treatment. The main problem I found in the article was the connection between poverty and malaria, and how the disease may prohibit developing countries from experiencing economic growth in may ways, including by making these regions potentially less attractive for investment, given the high risk of the labor force due to risk of contracting malaria.
The nobel prize lecture had many interested components that tied back to previous readings in this class. First, the author’s point that most economists fail to understand that “poor people are no less concerned about improving their lot and that of their children than rich people are.” This related to the discussion of how the poor spend their money in “The Economic Lives of the Poor.” As we looked at how the poor spend their money: on food, usually not maximizing their calories, on alcohol and tobacco, entertainment, and festivals, we see spending patterns may be very similar to those of wealthier households. As the lecture described that there are similarities between the spending behaviors of the rich and poor, we can look at general human behavior as the mechanisms driving spending rather than individual’s income levels.
Posted by: Ali Norton | 11/02/2015 at 01:03 PM
As Ali previously mentioned, the most important piece that I took out of the Nobel Prize lecture was that “poor people are no less concerned about improving their lot and that of their children than rich people are.” Many economists fail to realize this, and they assume that the standard economic theory is inadequate for understanding low income countries. Most economists may presume that we need a separate economic theory. However, what they fail to realize is that early economists already dealt with the conditions of low income countries. Classical economics was developed when most people in Western Europe were very poor, and also were subsistence farmers – similar to many low-income countries today. The historical significance was surprising to me as I had not previously thought about the conditions of higher income countries before they experienced economic growth. This confuses me a bit though. If economic theories were being formulated at a time when many people were low income, then why do economists today think that we need a separate economic theory for the poor? It seems contradictory. It may be that they are unaware of the history as I was, but the historical significance seems like a big thing to overlook. The “Economic and Social Burden of Malaria” hit on some key points that we discussed in class today. The most interesting points to me though were things that we had discussed in previous classes. For example, evidence has shown that areas with malaria epidemic experience less foreign direct investment. From Prof. Silwal’s talk, we discussed how important foreign direct investment is for developing countries. Because foreign investors might be scared to invest in the country as a result of malaria, the country may not be able to sustain long-term growth. Tourism also decreases when there is more malaria as people are afraid of contradicting the disease. All these are negative costs that the country bears as a result of the burden of the disease beyond just country borders. Furthermore, not only are there international costs to malaria, but there are many domestic costs as well ranging from loss to labor force, loss to human capital, potential loss in savings if people don't account for the future, etc. which all could have even more detrimental effects on the economy. This article highlighted the fact that malaria should not only be a health concern, but also an economic concern as well. The link between health and economic growth is clearly pronounced in this article, and it relates back to what we discussed in class today.
Posted by: Rachana Ghimire | 11/03/2015 at 06:45 PM
As someone interested in health, economics, and poverty, I found the Sachs and Malaney article on malaria and poverty to be particularly compelling. It reminded me a lot of our discussion in class today regarding why fertility/death rates may be so high in underdeveloped nations - when the probability of death is so high in a region due to a disease, it makes complete sense why families may have more children. Traditionally these high rates may eventually lead to development but that assumes that the health technology from human capital will be produced in order to cause the population shift. However, if people keep dying because of a persistent disease, the economic theory may not hold and development may not occur.
The article simply reaffirmed a concept that we already know - poverty cannot be boiled down to one cause. All of the issues surrounding poverty - health, education, agriculture, etc. are so intertwined with each other. I may be biased by my propensity for health issues, but I can't help but think that tackling the health problem of malaria should be the first course of action. Without proper health, it is impossible to fulfill the other human capabilities of life. Without fulfilling the other human capabilities of life, development will never occur.
It's clear that this article is trying to motivate investors to give more money to help eradicate malaria. Jeffrey Sachs has a huge reputation for being a proponent of foreign aid. Sachs continually argues that a "big push" of aid will help the problem. However, his critics say that there has been so much aid being given already and the problem is still astounding, so what is the point? With such astounding numbers of people, children in particular (1-3 million per year) dying, it is depressing that more isn't being done, especially when there is so much empirical economic, medical, and psychological evidence that there are simple ways to decrease the rates and that the disease has numerous and comprehensive negative externalities. I'm very curious to hear the economic argument against sending aid for malaria that some of Sachs' critics would offer.
Posted by: Jacqueline Carson | 11/03/2015 at 10:43 PM
I found Sach's and Malaney's article on the burden of malaria very fascinating. As other students have alluded to, the numbers in the article just absolutely astounded me. The fact that there are "300 to 500 million clinical cases every year, and between one and three million deaths, mostly of children" attributed to malaria is extremely devastating. Another statistic that stood out to me was the fact that "every 40 seconds a child dies of malaria, resulting in a daily loss of more than 2,000 young lives worldwide." These two statistics emphasize just how devastating a disease malaria truly is.
I also found the section on the relationship between poverty and malaria very interesting. Obviously, there is an issue of endogeneity between the two variables. Does malaria lead to poverty or does poverty lead to malaria? As the article suggests, perhaps both cases are have some truth. However, to me, the theory that poverty leads to more malaria makes the most sense. In poor countries, people are unable to pay for the necessary prevention methods thus increasing the chance of malaria transmission. Despite this sound theory, evidence suggests that economic development is not enough. I found it interesting and somewhat confusing that even wealthy countries (such as Oman and the UAE) have been unable to eliminate malaria.
Posted by: Kasey Cannon | 11/04/2015 at 01:18 PM
In Theodore Schultz’s Nobel Prize Lecture, it is easy for society to critique the decision-making of the poor, for most of their choices do not reflect an internal need nor determination to improve their impoverished state and standard of living. Theodore Schultz reiterates this notion by saying, “What many economists fail to understand is that poor people are no less concerned about improving their lot and that of their children than rich people are. (Schultz). Many of us will continue to ask the question, why? Why do the poor choose to misallocate their resources, instead of making choices that will enhance their well-being? It is difficult for an outsider to not judge or ridicule irrational behavior. However, similar to our class discussion about the “The Economic Lives of the Poor,” it is important to remember that society, including you and I, makes choices that might not be deemed as rational or reasonable. It is important to remember how external pressures can influence or jeopardize cognitive abilities, which will lead to choices that might not enhance one’s standard of living.
Therefore, investments in human capital can be very powerful, as this can create a population of quality. In Tuesday’s class, we talked about how it can be more beneficial to have a population of quality, rather than quantity. Investments in health and education will enhance the productivity of society, which will lead to greater economic returns, for “The value of additional human capital depends on the additional wellbeing that human beings derive from it” (Schultz). Therefore, productive investments in human capital will positively influence the lives of the poor, an important step to create economic prosperity and reduce poverty.
Posted by: Ali Coy | 11/04/2015 at 01:50 PM
One of the things that I found interesting from the Sachs article on Malaria was the affect that the disease has on the savings rate. I found this to be especially fitting given our recent study of the solow growth model and had never really thought about the impact that a single disease could have on the savings rate. It makes complete sense that the disease would have a directly negative impact on the human capital of a country because it limits peoples schooling but I had never thought that a disease could limit the physical capital a country has. As sachs says, "The evidence suggests that malaria decreases household savings as families areforced to hire labour to compensate for days lost to morbidity." This would shift the SY curve down and result in a lower level of capital per capita which I would imagine only intensifies the problem and creates a sort of never ending cycle.
Posted by: Jack Masterson | 11/04/2015 at 02:49 PM
While not a focal point, I felt the discussion on longer lifespans to be the most interesting part of the paper. It related back to his larger point on the necessity to increase the quality of human agents, but in a way I had previously not fully appreciated. Shultz claims under the “social-economic view” that “man has the ability and intelligence to lessen his dependence on cropland, or other traditional agriculture,” but he is only able to do so through cultivating that “ability and intelligence.” In society, one can only cultivate these traits by investing in them. Similar though to an explanation in prior readings that high death rates in childbirth explained the under education of women, shorter lifespans reduce the willingness to invest in children’s future. By increasing lifespans then we not only receive the “satisfaction that people derive from longer life” but we gain an increasingly educated and efficient workforce. Each year of life would in theory increase the marginal benefit of education. As we mentioned in class however, if we cannot increase the quality of these later years the economic benefit of education and the individual will remain stagnant. (for each additional year the lifespan increases)
Posted by: Benjamin Bayles | 11/04/2015 at 04:02 PM
As a chemical engineering major who is interested in going to graduate school for regenerative medicine and tissue engineering, the introduction grasped my attention right away with the mention of the genetic polymorphism sickle cell trait and its relationship with malaria. Economically speaking, I think this development of sickle cell trait in the human genome and its corresponding fatalities can also be considered a consequence of malaria. Not only this but the method of transmission of malaria and its relationship with temperature was also very interesting. Previously, I was not aware of the mechanism of malaria transfer, but the introduction is very thorough in prepping the reader with background information.
Now delving more into the economic side of things, I found the annual GDP difference between malarious countries those without intensive malaria to be quite astonishing. I feel like it's an accepted conjecture for the most part that malaria has a detrimental effect on the economy, however, putting actual numbers to the statement really puts it in perspective. Also, the 'quanity-quality' trade off of children was something I hadn't really considered (by being raising the fertility rate due to the infant mortality rate, each child gets less invested in it).
Posted by: Alena Hamrick | 11/04/2015 at 04:12 PM
Sach’s and Malaney’s article made the costs of malaria abundantly clear, and they are certainly staggering. I had only considered the the public and private health costs and lost income associated with malaria, as do many economists who study the effects of disease burden. However, changes in household behavior and macroeconomic effects should be considered as well when weighing the costs and benefits of malaria prevention programs. Malaria is more debilitating than most other parasitic diseases in Africa, with the Plasmodium falciparum malaria species causing fever spikes above 104 degrees every 24 hours. While this may affect children more than healthy adults with immunity, adults lose work time as well by spending time with their sick children. Long term cerebral, kidney, and liver damage can also occur, potentially exacerbating other health conditions later in life. It is unsurprising that the risk of all-cause mortality fell significantly farther than malarial mortality with the use of mosquito nets, because even people who recover from malaria can suffer long-term organ damage. Additionally, while anyone can be infected with malaria, malaria disproportionately impacts the poor. I would agree with the authors’ assertion that there is bidirectional causation between malaria and poverty. Malaria is relatively treatable with antiparasitic drugs; however, they must be taken on the correct schedule to prevent relapse, which is not always realistic for poor patients. Malaria parasites can live in liver cells undetected by the immune system for a long time, and complete disease eradication is necessary for treatment. One current prevention method being used in Africa is drug prophylaxis, where children in high-risk areas are given malaria drugs each month during the rainy season. These programs have been effective in reducing malaria prevalence and mortality and are relatively low-cost, but a concern is that they may increase the risk of drug resistance. The potential risks of malarial drug resistance must be weighed against the benefits of current disease reduction, with the hope that better drugs can be developed in the future.
Given the widespread health, economic, and social implications of malaria, it is shocking that only $100 million was spent per year on malaria prevention and treatment worldwide when this article was written. This is certainly an underallocation of funds, and governments should consider anti-malaria campaigns when attempting to improve economic growth and general development.
Posted by: Sarah Rachal | 11/04/2015 at 04:32 PM
Upon reading Sachs and Malaney's article on the economic and social burden of malaria, the first thing that came is just the extreme magnitude of destruction one disease can have on a country. Maybe it came as a such aa surprise because malaria is nonexistent in the U.S. so we rarely hear about it hear. Obviously, the sheer number of deaths from malaria is horrific and needs to be addressed especially since majority of the deaths are from children, but the thing that particular stuck out to me was the economic consequences. Similar to what Jack said in his blog post, it shocked me that one disease could be such an extreme burden on economic growth, but after reading the article it makes complete sense. Especially considering the example of the mining company that put the largest foreign in Mozambique and how malaria continues to deter other such companies from providing investment. However, the question that still remains after reading the article is what the most logical step is to start properly fighting against malaria. In the end of the article it stated that current efforts to fight malaria were way below what organizations such as WHO suggested is necessary to help eliminate the disease. It almost reminds as the big push theory, in that there just needs to be one giant effort to fight malaria in sub-Saharan Africa, and that the economic growth will follow suit because of the improvements in human capital, productivity, savings rate, fertility rate and so much more. The justification for spending almost $4bn to fight malaria is there because of the unlimited number of economic benefits, but not to mention the number of health benefits. Where this money comes from will most likely have to be a combination of both public and private sectors, but there should be overwhelming support to help finance the fight against malaria.
Posted by: Buck Armstrong | 11/04/2015 at 04:59 PM
I think it's important that the Sachs and Malaney article noted the need for funding. The article made it abundantly clear how detrimental malaria is for a nation's economy and for the health and well-being of those in that area. The topic of disease prevention made me think of Banerjee and Duflo's article about the economic lives of the poor and how the poor would react in this situation. While then I said that education is arguably the most important factor in development, I now would change that response. In some instances, that may still be the case. However, when an area is so crippled by a disease like malaria, health definitely trumps education. In class we were discussing how we were all surprised that these poor people were spending money on things like festivals when they didn't even have enough food to eat. Well, the developed countries need to take this into consideration when thinking about funding. With the evidence presented by Banerjee and Duflo, it seems unlikely that these poor people would devote any significant amount to disease prevention, not that they'd probably have a substantiative amount even if they tried. But like Professor Casey said in class the other day related to education, disease prevention would cost them now for only the potential of future gain. There are definitely private as well as social benefits to it, but that's not how these poor people are going to choose to allocate their funds when they don't even have enough to feed themselves. So it's important that the developing world find the funding to help these countries, as their outlook is bleak if we do not.
Posted by: Rachel Stone | 11/04/2015 at 05:06 PM
The discussion about achievement in population quality in Theodore Schultz’s Nobel Prize Lecture was the most interesting part to me. I think his approach to population quality as a scarce resource helps readers understand the economic importance of population quality. He then explains that when returns exceed the costs, population quality will increase. I think that this idea further validates our discussion on Tuesday. Furthermore, he addresses the importance of increasing human capital in a population. However, he explains that it is not just the additional units of human capital, but how valuable it really is. I immediately compared this idea to Amartya Sen’s Capability Approach. I think these ideas go hand in hand. Sen stresses the idea that it did not matter that the individual had opportunities, but what he did with those opportunities is what matters. Schultz’s idea plays off Sen’s approach. Schultz does not think that the presence of additional human capital is what will bring about better population quality. Instead, it is the additional human welfare that individuals gain from having more human capital. If human capital is entirely capitalized by an individual, there will be increases in productivity and entrepreneurial abilities for an economy.
Posted by: Emily Rollo | 11/04/2015 at 05:08 PM
Schultz’s Nobel speech almost immediately reminded me of Banerjee + Duflo’s “Economic Lives of the Poor.” Despite almost thirty years between the two papers, they have strikingly similar motivations; they both seek to offer some deeper insight on the economic constraints and challenges faced by the poor. Despite three decades of improvements in standards of living and other components of quality of life, the same problems appear in both papers like issues of land ownership, agriculture, and the need for greater investment in health and education. I’m not sure if this speaks to the sheer permanence of these obstacles to development and our ability to focus our attention on increasingly specific facets of these issues as technology progresses (maybe both).
One really interesting difference between the papers, however, is their respective discussion of entrepreneurs. Schultz presents entrepreneurs in a more capable sense. He writes that they are “calculating economic agents” and an “essential human resource.” In his critique of some trends in economic thinking, he says that farmers are “fine-tuning entrepreneurs, tuning so subtly that many experts fail to recognize how efficient they are.” Schultz seems to see the entrepreneurial spirit as a skill to be fostered, a vital component of human capital that can bring increasing returns in time. Banerjee + Duflo present entrepreneurship in a more cynical, but perhaps more realistic light, as a less-favorable alternative to wage-earning. The entrepreneurship they describe seems more similar to hawking and may be the only option for those with few skills and limited access to capital. They stress that these “businesses” are extremely small and therefore remarkably inefficient (lacking economies of scale), and they do not create new jobs for others in the economy. This type of entrepreneurship, despite its good intentions, “reinforces the proliferation of petty entrepreneurs” and may ultimately contribute to limiting the potential for economic growth.
Posted by: Caroline Sanders | 11/04/2015 at 05:16 PM
The Sachs and Malaney paper on economic and social burden of malaria is very interesting. It’s hard to imagine the dilemma of malaria in the United States since this problem has been solved and climate is drastically different than the tropics where malaria is heavily concentrated. With modern technology and modern medicine, I was amazed to see that there are still about 500 million clinical cases every year and about 2,000 children die daily from malaria. This can help explain why developing countries located in tropic regions produce so many children due to the fear that some of them may perish from malaria. This concept spills over with what we discussed in class on Tuesday on how developed countries don’t truly understand choices that poor people make in developing countries.
“The Econoimcs of Being Poor” paper also mentions the idea that wealthy people don’t understand the behavior of poor people, and this type of discussion does not exclude economists either. I feel this concept only complicates the process and/or transformation of a developing country into a developed country. Since most of the time, economists from wealthy countries are the ones attempting to come up with models to help initiate economic growth and development in these poor countries. Another point that is mentioned in this paper that I thought was interesting was that land is overrated. It was discussed that in different regions throughout poor countries, people are not any better off if they have good farming land compared to people who live on non-fertile land. Also, discussed in class on Tuesday, that the quality of the labor force is more important than the land, and it’s still underrated in today’s world.
Posted by: Riley Stout | 11/04/2015 at 05:18 PM
I found the insight review article on “The economic and social burden of malaria” very informative. The correlation between poverty and malaria seem to feed off each other as the causality runs both ways. The direct and indirect cost of malaria is severe. From disrupting household income to disrupting things on the macro level such as trade, FDI, GNP, and tourism. As these cost are almost impossible to fully measure they have dramatic social consequences. Such as increase fertility rates, which can lead to divestment in women’s education and foster gender inequality. Malaria and other diseases constrain the economies and the lives it effects. In order to improve the conditions, economies affected by malaria should be stimulated and a large focus should be placed on health and education. I was shocked to read that the programs to end malaria are underfunded, as the benefits from ending malaria would outweigh the cost when one considers the spillover effects.
Briefly the article mentioned malaria as a colonization barrier as colonizers were restricted in their movement into Africa due to the disease. Industrialization and improvements in technology gave colonizers in the 19th century the ability to penetrate Africa under the veil of imperialism. Malaria as a buffer ultimately succumbed to improvements in technology and health. Yet for hundreds of years the access to these improvements have been neglected in regions that colonizers needed them the most.
Posted by: Davis Turner | 11/04/2015 at 05:51 PM
Before reading the article on malaria, I had no idea of the extent the disease had on sub-Saharan African countries. When thinking about the effect of malaria in relation to the Solow model, it makes sense that malaria would affect not only the savings rate, but also the amount of capital per capita. Sach’s and Malaney state that high population growth rates are related to places with a high transmission rate of malaria. With such a high population growth rate, any kind of economic growth would be unsustainable. I noticed an overlap of ideas between Schultz’s lecture and Sach’s and Malaney’s piece on malaria. Schultz discusses the importance of investing in healthcare and education in order to improve the quality of people and increase economic growth. With a disease like malaria, economic growth is nearly impossible when significant investments are not made towards eradicating the disease – as it effects not only the health of the population, but the choices that they must make to survive. Like we discussed in class, growth is a function of education and health, where education is conditional on health. We see that in the study that education is put the side, especially for girls, because of the effect of malaria. It is incredible the way one problem can affect the whole economic system – how health has an all-encompassing effect. I’m curious why there have only been limited investments made in an effort to eradicate malaria, when it is clear that economic growth cannot happen in these countries while this disease prevails.
Posted by: Sarah Schaffer | 11/04/2015 at 06:12 PM
I'd like to home in on the portion of Schultz's speech that noted the reason "governments tend to introduce distortions that discriminate against agriculture is that internal politics generally favor the urban population at the expense of rural people." He goes on to presciently mention the occasional "green revolution," which he says briefly brings agriculture into relevance within the political-economic sphere. I wonder if today's "green revolution" is any different. There seems to be a genuine change in sentiment among middle and upper-middle class American consumers (I wonder if the same holds true for China) that traditional agricultural channels are not providing the same level of nutrition as locally-sourced products. There is significant alteration to fruits and vegetables in order to transport/store them in American grocery stores, and there seems to be a significant backlash against this (e.g. Whole Foods customers). Again, this could be a fad, but it's one that I'm certainly on board with and hope it brings newfound integrity to the U.S. governance of agriculture.
Posted by: Andrew Head | 11/04/2015 at 06:12 PM
I found the Sachs article especially interesting because it is a strong collection of evidence that supports the environmental pathways to development as a pre-requisite for most other drivers of growth. In other words, it implicitly argues that the development of North America and Europe, while perhaps driven by institutional strength and historical accidents, had to be preceded by favorable climate conditions. He does not say that things like macroeconomic stability or democratic regimes do not help development, but he stresses that the environment (tropical climates) can lead to different diseases (malaria) that may results in poor economic and human outcomes (low levels of education, weak labor markets, higher fertility, lower FDI and trade, etc.). I found very interesting that they brought up how weak the current efforts to eradicate malaria are, in spite of all the human and economic losses. This point brings up a “Rawlsian” ethical argument about the duty of the rich countries (well-endowed in terms of climate) to help the poorer countries. More succinctly, if behind the “veil of ignorance”, a country does not know if it will have high or low malaria risk, then will he choose one in which the rich help the poor or not? If we agree that people (or countries) are more averse to the risk of being poor and without help than attracted to being rich without having to help, then we would agree to an international network of aid. Another strong argument for the rich helping the poor to eradicate malaria is that this article shows how much trade and FDI are forgone due to malaria. If we accept the standard economic theory that in the long run, free flow of goods, services and capital brings net gains for countries, then an attempt to eradicate malaria in poorer countries might actually benefit the richer countries in the long run.
Posted by: Daniel Rodriguez-Segura | 11/04/2015 at 06:18 PM
Though I really liked reading Schultz’s insights about how quality of a population matters more than quantity, and the under appreciated importance of agriculture, I felt like most of it was review from things we talked about last class and classes before. That being said, I especially enjoyed reading the malaria article because 1) it changed my perspectives on the two-sided relationship between malaria and poverty and 2) it contained tons of information that was relevant to things we have already talked about. Before reading the article, I had always thought of high malaria incidence as something that was the product of high cases of poverty and that would decrease with economic growth. However, the article challenged that notion by discussing the negative economic effects of malaria. Like some of my peers have mentioned, I did not realize how drastic of an effect one single disease could have on economic growth and poverty. The article also discussed all kind of things (directly or indirectly) that we have talked about in this class and other econ classes, such as foreign direct investment, social vs private costs and benefits, risk-averse vs risk taker behavior, solow growth model, and women empowerment. It was really neat to see how all the things we have been learning are starting to tie in together as the class progresses. My brain was drawing all kinds of connections to past lectures and readings as I read the article.
Posted by: George Park | 11/04/2015 at 06:19 PM
I thoroughly enjoyed the delivery of the Schultz's "Economics of Being Poor". Would have been interesting to hear the lecture in person. He spends a good deal of the lecture calling out the mistakes of his peers, particularly the lack of investment in human capital in the rural, agricultural sector. This had we wondering how it ties into the idea of "urban-bias" associated with the Lewis two sector model. It seems that Shultz would called for investment towards improving the efficiency of the agricultural sector instead of siphoning away the labor. More capital is poured into the urban industrial sector, at the cost the agricultural sector. Investment in industry keeps grain prices low, at the expense of farmers. Aside from this, engraining the idea that the quality of people is of utmost importance really serves to put an emotional spin on the argument. It isn't just about improving efficiency and productivity in a neglected agricultural industry, it's about helping to alleviate the poverty that has come to be so closely associated it. Behind the production of the world's food is a person, little different than us, who isn't adequately equipped with the knowledge and skills to make the most of his livelihood.
Posted by: Alex Fox | 11/04/2015 at 07:21 PM
Very much to echo what others have said, it is astounding to me the devastating impact that malaria can have on a country, and how I feel that most Americans are relatively unaware. That fact that 2,000 children die daily from malaria shows the potency of the disease and the negative effects it can have on a nation's health and growth. We have talked so much in class about the importance of no growth factors, such as health and education, and their extreme importance for development. One of the major indicators that undeveloped nations share in common is a relatively high mortality rates and lower life expectancies. Being able to eliminate malaria would most likely have a strong positive effect on a nation's development. As we have also studied in class, the majority of low-income nations are centered in the tropics or subtropical climate regions. Malaria is also most concentrated in the tropics in subtropics. It would be interesting to see who much of the climate region effect is a cause of malaria, or if other factors relating to the climate region (resources, weather) are the main reasons linking low-income and climate areas. Policy makers and economists spend a large amount of time studying how they can strengthen institutions or spark growth or boost investment. These are all widely held to be important aspects of development. I think this paper does a great job of opening up new explanations for why some countries have failed to develop, and looking at other less studied factors, like the environment, could give us insight into new policies that could better help development than traditional avenues.
Posted by: Jonathan Jetmundsen | 11/04/2015 at 07:26 PM
The article written by Sachs and Malaney brought some very interesting facts to light. For example, the fact that a child dies every 40 seconds from malaria is astounding to me. This article also does an excellent job at predicting the social and private costs of malaria, and by extension, other deadly diseases. For example, students miss an average of 11% of school days a year in Kenya due to the disease. Additionally, malaria contributes to mental health problems in a country as well. The paper summarizes numerous other examples of malaria harming humans and human output, and it is truly awful to think of the damages this rampaging disease causes.
The Nobel lecture is very interesting, especially in juxtaposition with the Sachs and Malaney paper. Malaria is most prevalent in countries with lower production. Clearly, there is a link between these papers. Both articles emphasize that investment in health helps improve gdp. Therefore, in future policy decisions, it should be important to keep this in mind as we seek to improve not only economic growth, but also economic development.
Posted by: Kyle Tipping | 11/04/2015 at 07:41 PM
Throughout the course of this class, I have frequently thought about the ways in which economics does not necessarily coincide with the various factors that are involved with the decision making of the average person, especially the poor. After taking a course on poverty at W&L, I have basic knowledge about the decision-making habits of the poor and it has always seemed to me that these habits and tendencies would be incredibly difficult to model and anticipate in economic terms. That being said, The Economics of Being Poor (in addition to The Economic Lives of the Poor) was a very insightful read. Schultz' statement that, "Economists are no exception, for they too find it difficult to comprehend the preferences and scarcity constraints that determine the choices that poor people make," was an indication that I have been on track in my thinking.
One of the most captivating parts of the speech was when Schultz addressed the tendency to favor urbanization at the expense of the vast rural population. Schultz noted that, "This discrimination against agriculture is rationalized on the grounds that agriculture is inherently backward and that its economic contribution is of little importance despite the occasional "green revolution." The internal politics of agriculture are vital to the welfare of an overwhelming majority of people worldwide and yet it is so neglected. It is my hope that through further understanding of the economics of low income countries, the governance of agriculture can improve so that the economic potential of agriculture can be realized and utilized.
Posted by: Rachael Wright | 11/04/2015 at 07:49 PM
The Sachs and Malaney article dives into areas of society and the economy that I was not aware malaria impacted. When I think about the impacts of malaria, I am narrow minded when I solely focus on the health and education ramifications when the disease has profound effects on so many other aspects of life and the economy. From the negative effects on trade, to travel, to investment domestically and foreign, and to physical and human capital, the evidence and research is remarkable in its impacts on malaria ridden countries. The one thing I noted when reading the paper was the catch 22 that exists between malaria and poverty. They are both so closely correlated that one cannot seem to benefit without improvements in the other. The poor are susceptible to contracting malaria with little expenditure on pesticides and health, and because they are located in rural climates where agriculture and malaria thrive. On the other hand, malaria "impedes economic growth" through constraining human and physical capital, trade, tourism, and investments. In attempting to cure this problem, we must look to tackle the disease itself while also allocating resources and help to those impoverished.
Posted by: Hugh Gooding | 11/04/2015 at 07:56 PM
I found Schultz’ discussion on human capital and technology’s ability to increase resources interesting in his Nobel Prize lecture. This topic interested me, as I have grown up believing that the Earth had a fixed carrying capacity, and when we reached that population all hell would break loose. I enjoyed the example he provided that illustrated the effect technological development can have on production, as he states that in the US between 1932 and 1970, there was 33 million less acres of land, but the US produced 7.59 billion more bushels (3 times more). Also, I found it reassuring that increasing human capital might assist population reduction, as he points out that quality and quantity are substitutes. Therefore, by increasing technology, more resources can be produced, and by increasing human capital, there will be more resources per capita. Lastly, I thought Schultz’ nicely summarized man’s ability to manipulate the world he lives by using Alfred Marshall’s quote: “Knowledge is the most powerful engine of production; it enables us to subdue Nature and satisfy our wants."
Posted by: Austin Gilbert | 11/04/2015 at 08:05 PM