Tag Archives: Poverty

Waiting for the Barbarians – J.M. Coetzee

“Time for the black flower of civilization to bloom.”

I don’t know how to review fiction, so instead I’m just going to let Coetzee speak for himself. I’ll give a bit of background, but there are so many quotes with wisdom I think I’ll just share those.

Waiting for the Barbarians is the story of the Magistrate, a man who has “not asked for more than a quiet life in quiet times.” He administers a small town on the border between Empire and the barbarian lands. As the novel progresses, Empire becomes concerned over the possibility of war with the barbarians: interrogators come and go, prisoners are taken, and the army moves in. It captures a clash of worlds, Empire and barbarians, humanity and brutality, complexity and simplicity.

As the magistrate witnesses some of the horrors of Empire, he periodically reflects on them:

“I know somewhat too much; and from this knowledge, once one has been infected, there seems to be no recovering… The knot loops in upon itself; I cannot find the end.”

On new beginnings;

“It would cost little to march them out into the desert (having put a meal in them first, perhaps, to make the march possible), to have them dig, with their last strength, a pit large enough for all of them to lie in (or even to dig it for them!), and, leaving them buried there forever and forever, to come back to the walled town full of new intentions, new resolutions. But that will not be my way. The new men of Empire are the ones who believe in fresh starts, new chapters, clean pages; I struggle on with the old story, hoping that before it is finished it will reveal to me why it was that I thought it worth the trouble.”

On time;

“What has made it impossible for us to live in time like fish in water, like birds in air, like children? It is the fault of Empire! Empire has created the time of history. Empire has located its existence not in the smooth recurrent spinning time of the seasons but in the jagged time of rise and fall, of beginning and end, of catastrophe. Empire dooms itself to live in history and plot against history.”

On certainty;

“In all of us, deep down, there seems to be something granite and unteachable. No one truly believes, despite the hysteria in the streets, that the world of tranquil certainties we were born into is about to be extinguished.”

I’m not sure a selection of quotes do him justice, but Coetzee is very much one of the wise, and there is definitely wisdom to be gleaned here.

There’s also some wisdom to be found in the Subtle Illumination email list to your right, however. Or, keep reading Coetzee (or in the UK or Canada).

Alleviating Poverty – Poor Economics by Banerjee & Duflo (2)

Part 1 of Review available here.

“To progress, we have to abandon the habit of reducing the poor to cartoon characters and take the time to really understand their lives, in all their complexity and richness.”

I’d heard before that on average, tall people earn more money. What I hadn’t heard was that apparently if you control for IQ, that difference disappears – tall people are smarter and so have higher wages. A suggested explanation is malnutrition, which both reduces height and lowers IQ, and poses a significant challenge to poverty. This and other fascinating studies make up the bulk of Poor Economics, as Banerjee and Duflo follow their own advice and turn to the data to understand the challenges of development.

If you want to help the poor, say Banerjee and Duflo, you need to give up grand theories and ideas of structural change, no matter how appealing a silver bullet may be. Rejecting Why Nations Fail, they argue that poverty is not the product of grand institutional failures, but rather is an individual or local condition, making cookie-cutter remedies useless. Development must be achieved by a series of small, well-thought out and well-tested steps, gradually accumulating into big changes, not grand designs with little relevance to the lives of the poor.

To do so, they point out, it is essential to first actually understand the lives of the poor. Arguments often rage over whether the poor are in a poverty trap, the concern being that had they only a little more money for health, schooling, or business, they could invest and increase their wages, starting a positive cycle of investment and returns. B&D, however, dismiss the arguments of Sachs, Easterly, and others, and point out that the answer can only be found in the data, through randomized control trials and empirical work, not through theory or ideological debates.

They do make some broader claims. Without a stable job, for example, they suggest there is little incentive to save, invest, or plan for the future. As a result, the creation of jobs with job security may be justified even if it is an inefficient method of job creation, because of the indirect benefits. I’m not sure if I agree or not, but it’s an interesting point.

Perhaps the one criticism I have of Poor Economics is that their attempt to stick to economic rationality, though understandable, can feel forced. At several times in the book, as when they’re discussing how some households will borrow at a 24% rate of interest in order to save it at 2%, psychological or behavioural explanations seemed like a natural next step in the discussion, and I was disappointed when they neglected them. Still, the book adds a much-needed voice in the discussion of economic development, one driven by data, not ideology.

Still interested? You can read my summary of their lessons for development here, or sign up for the Subtle Illumination reading list to your right! Or, you could always head to Amazon and get the book your yourself (or in the UK or Canada).

Poor Economics by Banerjee and Duflo (1)

Part 2 of review available here.

“The ladders to get out of the poverty trap exist but are not always in the right place, and people do not seem to know how to step onto them or even want to do so.” – Banerjee and Duflo

I’ll be posting a review of Poor Economics on Sunday, but it’s looking like a long one, so in the interim I thought I’d post a summary of their five lessons for economic development, and leave discussion to Sunday.

The poor often lack information or have false beliefs, leading them to do things like ignore potentially useful dietary advice.
The poor are responsible for far more decisions than comparable households in the West, to their cost. We take sanitization of water or the removal and treatment of sewage, for example, for granted: for the poor it can be a conscious choice. Too many conscious choices can be overwhelming, and reducing the number of decisions that need to be consciously made is no more patronizing than sanitizing household water in the US.
There are often good reasons for some markets for the poor to be missing, and so we can’t assume they will always self-form or should be formed. A health insurance market for the poor, for example, though of potential benefit, has struggled to form because the insurance options that can be sustained by the market are not what the poor want.
Poor countries are not doomed to failure because they are poor. We often hear of the failures of aid programs, but in many cases those failures are avoidable through small design fixes, rather than grand institutional change of the social and political structures.
Expectations of outcomes can often become self-fulfilling prophecies. Children drop out of school because they don’t expect to be good at it; adults stay in debt because they don’t expect to be able to stay out of it. Getting a virtuous cycle started can be enormously powerful.

Number 5, I would argue, is a lesson for life, not for development, but nevermind.

As we’ll find out on Sunday, the foundation of their book, however, is that these are not general rules applicable everywhere. Instead, they argue that development cannot be conducted by universal rules and general theories. It must be adapted to suit context, culture, and location, all of which require data, not ideological theorizing.

You can read part 2 of the review here. In the meantime, keep reading (or in the UK or Canada). Or, join the Subtle Illumination email list to your right!

Explaining Why Nations Fail – Acemoglu and Robinson

Acemoglu and Robinson present in Why Nations Fail: The Origins of Power, Prosperity, and Poverty an important idea: that it is institutions that determine whether countries are rich or poor. When institutions concentrate power in the hands of only a few, nations fail. Unfortunately, their book can also be frustrating – their focus on institutions can feel like it blinds them to other possibilities, and as a result their examples, though fascinating, can feel repetitive.

A&R argue that political and economic institutions can be extractive (designed to extract resources and centralize power in an elite who will then oppose change or progress) or inclusive (decentralizing power and allowing individuals economic autonomy). Both types of institutions, they argue, must be inclusive for long run prosperity. It’s an important division, and one that has a lot of explanatory power: anyone who’s crossed the American border with Mexico can’t deny that it is the institutions, not the fifty feet of distance, which matters.

The bulk of the book provides examples. Their studies are both well written and compelling, but they also make me wonder whether institutions are really the distal cause: apart from the simple case of countries with a colonial past, there is little discussion of what leads to good institutions. When they do raise the issue, they seem to implicitly assume that institutions are chosen rationally by elites, based on the cost and benefits of each type, an assumption that seems unconvincing.

Economists and development experts often underrate the importance of institutions, and so Why Nations Fail makes a critical contribution. It also makes a strong argument against the centralization of political power, which can be tempting in the short run but corrupts institutions and social norms in the long run. It’s engagingly written and full of interesting facts, and so is well worth the read for anyone remotely interested in these issues (and everyone should be). It just doesn’t seem to entirely meet its (admittedly ambitious) mandate: to explain why some nations fail and some succeed.

Want more enlightenment? Keep reading (or order from the UK or Canada). Why Nations Fail is certainly worth a look.