Many of the world’s poorest countries are saddled with high levels of external debt owed to other governments, institutions such as the IMF and foreign companies and individuals.
Is the UK economy being held back by 'zombie' households lumbered with too much debt to go out and spend? Angus Armstrong, director of macroeconomic research at the National Institute of Economic and Social Research, argues this problem is linked to growing inequality over the last 30 years.
There is increasing interest in the use of
"smart aid" - aid
programmes that use experimentation and focus on bottom-up projects in order to increase the effectiveness of each £
or $ given in aid
Does aid help or hinder economic growth and development? This is the subject of a fierce debate in the development economics literature
What role can and what role should overseas aid play in promoting and sustaining economic development? These are hugely contentious questions in the subject. Estimates vary from those which suggest that overseas development aid has added about 0.5 per annum to growth in recipient countries to those which suggest that it has had no positive, or indeed negative, effect on growth.
This short report from Al Jazeerah news looks at the rise of e-cash systems (electronic money) as a way for aid agencies to transfer cash to vulnerable people rather than traditional sacks of food aid. The Center for Global Development has been at the forefront of establishing cash on delivery aid - more details hereread more...»
|Employment Rate||Employment Rate||Unemployment Rate||Unemployment Rate||Inactivity Rate||Inactivity Rate|
|Mixed or Multiple||64.3%||55.3%||15.7%||15.8%||23.7%||34.3%|
|Chinese & Other||67.0%||51.8%||10.3%||10.6%||25.3%||42.1%|
If you have seen the news stories today showing how workplace discrimination towards ethnic minority women continues to cause the government concern, you may be interested to read the full report. It is available from the Runnymede Trust (it requires registration but it is free) and has been written for the All Party Parliamentary Group on Race and Community. There's a brief summary from the BBC, but the full report gives recommendations that you might like to present to students as possible government intervention strategies and get them to evaluate accordingly. The table above gives you a flavour of the statistics that can be used to discuss inequality of income and wealth.
Here is a terrific 15 mins audio lecture from development economist Paul Collier and broadcast on BBC 3 recently. Paul Collier, author of "The Bottom Billion", Professor of Economics and Director of the Centre for the Study of African Economies, Oxford University, advocates the giving of overseas aid only to countries without a "credible prospect of escaping mass poverty over the next generation."
"Properly justified, and clearly bounded, most British people have the decency to support turning despair into hope. But people should not be expected to aquiesce if co-erced through taxation into meeting need wherever on the globe it is found." "Why Poverty?" features five speakers on different aspects of the subject of poverty and is part of a pan-BBC season of programmes on the topic.read more...»
A very quick heads-up to a series that the BBC will be running over the next three weeks, and which looks very valuable for those studying Growth and Development topics. It kicks off tonight with Four Born Every Second, which looks at the life chances of newly born babies in the rich world and the poor world - BBC1 at 10.35.
There are some related links on their Debate page here
A hat tip to Ruth Tarrant for finding and sending through a link to a related resource for A2 macro on development/poverty etc: http://www.open.edu/openlearn/society/international-development/ou-on-the-bbc-why-poverty This ties in with the "Why Poverty?" series on BBC, but packed full of great resources to exploreread more...»
My AS macroeconomics students this week are researching the topical issue of a living wage and the possible macroeconomic effects. The title of the assignment is:
"The introduction of a living wage in Britain to supplement a minimum wage will improve the long term performance of the UK economy" Discuss. (20 marks)
I have put together some news articles and videos on this topic using a Pinterest Board. You can find it by clicking here
BBC Newsnight Report on Living Wages - July 2012 - click here
I'm sure you don't have any problems convincing your students that education is a merit good/service. Every so often, however, it may be difficult for young people in the UK, aspirational and aiming high, to see how their own learning impacts so positively upon the wider society. Although we constantly debate the quality of education in the UK and strive to improve, many young people will take opportunities to access schools and colleges for granted - perhaps arguing about local differences and the cost of higher education but rarely about actual access to basic education. With such relatively high levels of literacy and numeracy amongst British youngsters it is difficult for them to imagine a society where this is not the norm. The Waseela-e-Taleem initiative in Pakistan, however, could prove a useful example of how government intervention into education is about more than just the structure of assessment and paying teachers - but a country's drive to improve access to basic education and shift its economic as well its political and sociological prospects.read more...»
Here are some links connected to the news that the United Kingdom is drawing to a close financial aid to India by the year 2015. The focus will shift from aid to trade. Bilateral trade between the countries in 2010 was worth £10 bn. The countries have set a target of £20 bn by 2015. We also link to a new Inside Story programme from Al Jaxzeerah on the continuing debate over the effectiveness of and future of overseas aid in the world economy.read more...»
When discussing consumer spending and household savings, I find that students frequently question why poor people tend to save less. Surely, being more concerned about their future, poor people should be saving more?
You may have been too busy to notice but today has been National Stress Awareness Day. This comes just a few days after Ed Milliband's speech about the taboo of Mental Health and how it impacts upon people's lives. If you haven't done so recently, do check out the World Health Organisation 's website which has lots of data on the prevalence of mental health issues around the world with the most startling facts being that 1 in 4 people around the world suffer from mental health issues at some point in their lifetime affecting as many as 450 million people.
And yet, when was the last time you used this as an example of labour market failure or poor economic performance?read more...»
This is the title of a new report from Save the Children, released ahead of a meeting of a high-level UN panel on poverty which takes place in London today. It says that global inequalities in
wealth are at their highest level for 20 years and are growing. In some countries, the gulf between the richest and poorest families has increased by up to 179% over the past two decades, and more than twice the numbers of poor children die before the age of five than rich children. While the charity acknowledges progress has been made in goals such as reducing child mortality, the report says this has been uneven across income groups.
Here is a streamed revision presentation on aspects of micro finance and fair trade as part of a course on development economics.read more...»
Jonny Clark has beaten me to it with his blog about today's news about the Living Wage - there is a rich seam of resources here for issues for study around poverty and inequality. The concept has high level support - hailed by Boris Johnson as it is "....not only morally right, but (it)makes good business sense too." and endorsed by Ed Miliband as " A really important idea". I would like to add a trio of items from the BBC website which could add evidence to student analysis - particularly as Nov 4th-10th is designated Living Wage Week , so this could make a timely topic on the return from half term!
You might see a raft of stories out today regarding the latest report from KPMG on the number of people within the UK who would appear to be earning below the identified 'Living Wage' in the UK. The rate of this living wage is higher than the statutory minimum wage (£7.30 per hour for those outside of London compared to standard £6.19 per hour n.m.w.) and attempts to set a rate at which people can earn enough to pay for the basic cost of living. The report states that approximately 1 in 5 people in the UK earn below the Living Wage (with the situation varying around the UK) and this is an increase on the number who were below the threshold during the last audit. The Independent includes the image above and gives a brief (if slightly politicised) summary. The Living Wage and National Minimum wage are good indicators for students giving responses on relative poverty. A good exercise might be to ask students why there is a difference between the two standards or use the information and graphics here to determine why there are wage differentials for the jobs outlined above. If you want to give your students some extended work you might like to get them to read the document below which attempts to explain and give rationales with regards to the calculation of the Living Wage or get them to have a look at the Living Wage website which shows what the campaign is trying to achieve.
Today I went to a fascinating and very thought-provoking lecture from Kate Raworth, a Senior Researcher for Oxfam GB. She introduced the audience to the idea of doughnut economics, and certainly convinced me about the usefulness of this very elegant and accessible development economics theory. I can't wait to share it with my classes when we're discussing sustainable development next year!
Unit 4 essay from Max Goswami-Myerscough
China has undergone high levels of wage inflation since the turn of the century. As stated in the extract, a US Bureau of Labour report showed that between 2002 and 2008 real hourly wages more than doubled in China’s manufacturing sector. Comparatively, wages only rose by 20% in the US. In addition to this, according to Jim O’Neill, by 2009 over 5% of the population of China (approx. 65 million) had incomes of around $35,000 p.a. China has been considered to be one of the main outsourcing destinations for cheap labour over the years but this may change if such high levels of wage inflation persist.
I have uploaded onto slide share a revised short classroom presentation on the economics of overseas aid as part of our study of economic development.
When teaching economic growth and inequality as part of our A2 macro course, I used these news clips to support the lesson and discussion.read more...»
Preparing to start teaching market failure at AS, I have been looking for some new material. At the library I stumbled across the film http://www.bananasthemovie.com/, a one sided account of alleged illnesses suffered by banana workers. I plan to show a few minutes on the hope it will promote debate on merit goods/externalities. There is some good stuff on CSR on the Dole website too. Watch the trailer using the link below
This article in the BBC about the 21st anniversary of the launch of the Big Issue newspaper acts as a timely reminder that we can find our very own examples of absolute as well as relative poverty in the UK.read more...»
Explain and discuss four indicators of progress made by India in achieving her main development goals.
Yesterday I took some Oundelians to attend the Public Policy lecture at the LSE, entitled Policy Challenges for Growth in Africa and South Asia. It was sponsored by the IGC – the International Growth Centre: http://www.theigc.org/ - as part of the LSE Growth Week http://www.theigc.org/events/growth-week-2012 .read more...»
Using agrichemicals is directly correlated to infant mortality in India. This is the central finding of research presented by Nidhiya Menon (Associate Professor of Economics, Brandeis University) at the International Growth Centre’s Growth Week 2012.
One of the stock answers students are encouraged to make when describing the pitfalls of high inflation is its link with increasing the burden on the poorer sections of society. The argument goes that periods of high inflation are not traditionally matched by an equal increase in benefit payments. This has not been the case in recent years in the UK - benefits have been rising at a faster rate than inflation, even during its upwards blip of recent years. Now the argument has reverted to one of how the cost of benefit payments have become excessive for a Government attempting to reduce its deficit and bring spending under control. Reports by the BBC and covered by the Guardian today have suggested that the Government is about to break this link.read more...»
This blog will link to a series of posts on some of the possible constraints or limitations on the sustained growth and development of a country. Keep in mind a high level of diversity between countries and regions, some of these constraints have a bigger effect on potential growth and development in some countries than others. Successful and effective policies are those that target and address the constraints. Some of these factors apply mainly to developed countries and some are focused on the growth potential of lower-income emerging economies many of whom have enjoyed rapid growth in recent years. Remember that economic growth is a long-term concept referring in the main to a nation’s productive potential and competitiveness:read more...»
The BBC is on spanking good form at the moment. Here’s another little gem from them this time on globalisation.
Usually we think of globalisation as moving production to China or the fact that you can get Coke Cola in every country in the world (except Cuba and North Korea apparently! ). We might look at how this means lower costs of production and how this might be hard to organise and manage due to language and distance. Perhaps even looking at any regional differences that are needed to make the brand work (McDonald’s have just announced their first vegetarian outlet in India, for example) and so on. read more...»