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10/30/2016

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Michael Hegar

Thinking of our discussion on population from Tuesday, Schultz line that said, "My approach to population quality is to treat quality as a scarce resource...." This idea that the quality of a population is a scarce resource is a new way too look at this issue. Better population quality is a means to the end of more freedom. For instance if women's agency is increased, they will have fewer kids, they will take better care of everyone in the house hold. Thus raising population quality.

In "The economic and social burden of malaria" one idea that really struck me was the link between economic prosperity and malaria. The example given was countries of Spain, Portugal, and Greece. In the 1940s these countries were high risk zones for contracting malaria. But in the 50s they solved the problem and as a result their economies and tourist industries boomed. This might not be the case for every country if malaria is eliminated but that does not necessarily mean solving the malaria problem is not a good thing in and of itself. Malaria is still a link between high death rates, both directly and indirectly (by way of receiving contaminated blood transfusions and developing HIV and/or AIDS.) Malaria also prevents the movement of human capital and the movement of markets to regions where malaria is prevalent.

So often I take for granted the things I have. I live in America and even though the country has its problems, I still don't have to worry about malaria. The Nobel Prize Lecture got me thinking about how much I don't know about how the poor think and make decisions. I can study it and think about it as much as I want but at the end of the day I am not the one faced with the decisions, i.e. in their shoes.

Elizabeth Wolf

The “The Economic and Social Burden of Malaria” outlines a number of different causes of malaria’s prevalence in the developing world, what I found to be the most concerning in this article is the 2,000 “missing children” every year because of malaria. Similar to Sen’s circuitous reasoning between development and freedom, malaria is a means and a cause of poverty. Ester Duflo’s concept of “missing women,” also applies to these children – by dint of being born in the developing world in absolute poverty – as they are discriminated against since birth, and often at the prenatal stage as well. As the article points out, GNI per captia is an adequate measure of the effects of malaria-related deaths, but the unquantifiable social costs of losing 2,000 young members of the population annually represents a much more staggering loss for the country. In the way that economist argue that the full productive capacity of the nation cannot be reached if half of its population (women) are not utilized, how much more so when children – both boys and girls – are not utilized because they are dead. Their death does not only cause an immediate economic and emotional loss to their family, but has ramifications because these individuals are not reaching productive age though family resources are being allocated to their development. Simply, malaria makes children an investment with little chance of return. Even from a detached and calculated perspective, this is a crisis that plagues the least developed countries the worst. I think that a policy similar to “the Big Push” would be an effective strategy in this scenario, with aid programs directly targeting simple measures of prevention and education on the disease. On this front, I agree with Kinsey’s outrage at the inefficacy of the government to provide what appears to be very simple things like bednets and HIV-tested blood for transfusions and Andy Kleinlein’s point about where “all the money is going.” Targeted aid seems to be an answer to solve the crisis of thousands of preventable deaths, though the actual execution of this reduction in the ultimate market inefficiency seems significantly harder in practice than it does on paper.

Ddevereux9

These two papers remind me a lot of what we are studying in Professor Blunch's Health Economics course. We learned no two regions, let alone countries, can be treated the same in terms of policy. So stating this, comparing the development of western Europe to developing sub-saharan Africa is not a feasible option. We also learned that health problems, such as malaria, are not solved by increasing GDP alone. Yes it may help, but there are more factors, such as overall health education and infrastructure that are more important.

Tony Du

In the Economics of being poor, one of the central ideas put forth by Schultz is that the poor do not have a separate economic framework for decision making that deviates from the standard. This is congruent with our class discussions on the rationality of the choices of the impoverished. We make the assumption that the poor should spend any excess income towards food and other staples, ignoring the fact that the money “wasted” on festivals or sweets or even tobacco/alcohol indulgences actually maximize utility. After all, there is more to life than working and eating. Once again, a Sensian definition of development is far more important than the narrow scope of economic growth- the emphasis is on freedoms and the ability to live a satisfactory and meaningful life.
Schultz also discusses the importance of investments in health and education, and the impacts that they have not just on economic prosperity but on the well-being of the poor as a whole. Sachs and Malaney also draw attention to the relationship between health (in this case the effect of Malaria) and the accumulation of human capital. Malaria obviously has a negative impact on the cognitive abilities and nutritional state of the sick. These geographically-influenced diseases have lasting impacts that penetrate all aspects of life and well-being. We see yet another instance where improvements to people’s freedoms can be made outside the scope of economic growth.

Charlotte Braverman

Most striking to me about Sachs’ piece on malaria were the myriad spillover effects of the disease burden. A cursory glance at the evidence and a superficial analysis of its effects on economic growth might lead one to consider only the lost output and the costs associated with disease prevention and treatment. However, upon closer consideration, Sachs and Malaney reveal a whole host of negative externalities. One that particularly stuck out to me was the impact of malaria on fertility rates, this in turn causing a decline in investment in women’s education and agency. Constrained by the societal obligation of childbearing, women are robbed of the opportunity to pursue an education or gainful employment. As we have already discussed in class, there is evidence to suggest that this lack of investment in women, an injustice in its own right, can also hinder further economic development. Perhaps equally concerning are the high population growth rates that result from high fertility rates as it is important to consider the additional pressures more children will have on already resource-constrained families. Ultimately, it seems this phenomenon will not only negatively impact women but their children as well. It had never occurred to me before that something like malaria could be a contributing factor to these issues.

The concerns about foreign direct investment and isolation from the rest of the world were also particularly compelling to me. Thinking particularly about the rapid economic growth of China, trade has been an integral part of their growth story. As emphasized by Rodrik in Growth Strategies, the engine of sustained economic growth will look different in different countries so trade is not necessary the key for all developing countries. Nonetheless, a potential disconnect from the globalization that is so essential to many economies is concerning.

Jim Grant

“The Economics of Being Poor” and, “The Economics and Social Burden of Malaria” present similar arguments in the role of human capital in economic development. The Malaria paper offers a great insight into the numerous externalities of disease on an economy, and provides good research that supports Schultz’s paper to an extent. Sachs and Malaney provide startling evidence on the adverse effects of malaria on the GNP loss due to loss in human capital, especially the youth of these countries. It seems clear that more should be done to prevent cases of malaria and provide treatment. The article mentioned needing an expected $2.5-4 billion dollars a year to combat the disease in these countries. It’s difficult not to go to the cliché of military spending when thinking about this issue. One could argue that spending money on malaria prevention in developing countries isn’t our responsibility, but when military spending is in the hundreds of billions per year and this article says that they’d need less than 1% of that to make some significant change can you really argue the necessity of such costs? I believe if we spent more time investing in the youth of these countries to prevent such debilitating diseases (among other similar causes to improve development) There might not be as much need to spend on the military as the economic stabilization of these countries would hopefully lead to the diplomatic stabilization as well.
Schultz brings up some interesting points about how land is overrated. I didn’t know if I believed him at first and to be honest I don’t think he did a good job convincing me. He compared the similarity between the economies of two areas in India with severe differences in the fertility of their respective land. If his argument hinges on the fact that geographic advantage is irrelevant or at least overrated then I have to passionately disagree. That has been the key factor in history since the beginning of time, who are we to say we have evolved beyond the point of such influence.
The malaria article proves that geographic conditions greatly influence economics and I’d go to the extent to say that it has a strong relationship with human capital. If a piece of land is fertile but has is plagued by mosquitos then it would drastically affect the inability the community to develop. In that sense I guess Schultz is right, but I think he fails to prove his point by accounting for the fact that land and development has a direct relationship with your ability to produce human capital.

Corey Guen

While reading Schultz’s lecture, I was struck by a paragraph under the header, Land is Overrated. Here, Schultz comments on the irony that the dismal science of economics can demonstrate that Malthus’ apocalyptic model of our planet’s supposed inability to sustain a growing population with adequate food resources is unlikely at best. He concludes this section with a rather poignant quote, “Mankind's future is not foreordained by space, energy and cropland. It will be determined by the intelligent evolution of humanity.” This reminded me of a quote I found prefacing the first chapter in Matt Ridley’s Book “The Rational Optimist”, one that related quite well to the above quote and our class discussions. Thomas Babington MaCauley was quoted saying, “On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?” While not an economic concept, it has wide reaching implications, and both observations should temper the often inflammatory and dramatic tone of predictions about the future. In his post, Alex Shields wondered when we might face the situation where our reliance on technological advancement to save us from ourselves will fail, and he is right to do so. Humanity has demonstrated throughout its history the ability to adapt when necessary, and especially in the past few centuries to drastically improve our productivity, and by extension the quality of our lives. While we cannot just sit idly and wait for technology to save us, I agree with Ridley’s overall argument that we should not be as terrified of the future as we tend to be. Keeping this in mind, we must remember to keep open all possible opportunities for those future technological advances to be realized, and this will be most efficiently achieved by promoting development through women’s agency, improved education and free flow of all forms of capital, human capital in particular.

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