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ChallengesofWorldPovertyDavidDonaldsonandEstherDuflo

14.73MIT

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Poverty: whatarethechallenges?

WatchthemovieDiariesofJeffSachsandAngelinaJolie inAfrica

Whatarethemainthemesofthemovie?1. Themagnitudeofthechallenge2. The implicationsofpovertyoneveryday life3. Thecausesofpoverty4. Viciouscircles:Howcausesandconsequencesofpovertymutuallyre-inforce5. Possiblesolutions

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Themagnitudeofthechallenge Poorcountriesareverypoor indeed

What istherichestcountry inthetablesfromtheWorldBankdevelopmentreport(percapita)

What isthepoorestcountryinthetablesfromtheWorldBankdevelopmentreport(percapita)

What istheratioofthetwo? Butwait... isnt lifecheaper inpoorcountries?

Sincepeoplearepoorlypaidand landrentsaredesirable,anythingthat ismainlyproducedbypeopleshouldbecheaper(food,etc.).Ontheotherhand ipodswillbejustasexpensive...

WecancorrecttheNational incomeforthecostof living: thisiscalledaPurchasingPowerParityadjustment

What istherichestcountry intheworld,PPPadjusted What isthepoorestcountry intheworld,PPPadjusted What istheratio?

Thisdifference istillquitebig

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Themagnitudeofthechallenge An internationallyusedpoverty line istwodollarperdayperperson(poor)oronedollarperdayperperson(extremelypoor).

Howmanycountriesaretherewherethe incomepercapitaatPPP is lessthan$365(onedollarperdayperperson).Howabout2dollarsperdayperperson?

(roughly)howmanypeople isthat? However..... therearepoorpeople inrichercountries:TheincomepercapitaofIndiaislessthanadollaraday,buttherearemanypeoplewho livewith lessthanadollaraday inIndia.Why?

Andtherearerichpeople inpoorcountries. Howmanypeople liveunderadollaraday?

AccordingtotheWorldBank, in2005,therewere1.4billionpeoplewho livedunderadollaraday.

Outofhowmanypeople intheWorld?

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The implicationsforeveryday life

Mortality:whatcountryhasthehighestchildmortality? Education:whatcountriesasthe lowest literacyrates? Hunger:AccordingtotheFAO,morethanabillionpeoplearehungry

Qualityof life: timespentcarryingwater;others?

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Thecausesofpoverty

Poor landquality: lowagriculturalproductivity Poor infrastructure: schools,water, Poorhealth:malariamakespeopleweak;thewidowcannotfeedherchildren

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Viciouscircles

Healthandwealth

Educationandproduction Landproductivityand individualproductivity

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Thesolutions

Themovieproposesanumberofsolutions:FertilizerBednets

Internet inschoolSchoolmeals

Cleanwatersources Others?

Whatarethecommonfeatureofallthesesolution? Theyarehighlycosteffective(fertilizer;Bednets) Theyjumpstartvirtuouscircles,outoftheviciouscircle

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Whyarentthesesolutions implementedalready?

AccordingtoJeffSachs? Lackofpoliticalwill inrichcountriestohelpthepoorest.

Accordingtosomeonewhowouldbemoreskeptical(BillEasterlyWhiteMansBurden,DambisaMoyoDeadAid)? Arethesesolutionsreallyeffective? Cantheyreallygenerateavirtuouscircle? Ifnot,howcanwesustain

them?

Aretheysoeasyto implement?

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Whatwewilldo inthisclass Digdeeper intoeachofthesethemes... What ispoverty?Howtomeasure it? Caneconomicgrowtheradicatepoverty?Howdothepoorpeople live?

Causesandconsequencesofpoverty: nutrition,disease,education,etc.What istheirrole inmaintainingpoverty?whataretheconditionsforviciouscirclestoemerge?

Howcanwebestentertobreaktheviciouscircle?Whathasbeentried?Whathasbeensuccessful?Whatcanwe(asindividual)do?whatcanourgovernmentsdo? : trade,aid,andallthat....

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MIT OpenCourseWarehttp://ocw.mit.edu

14.73 The Challenge of World PovertyFall 2009

For information about citing these materials or our Terms of Use, visit:http://ocw.mit.edu/terms.

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MIT OpenCourseWarehttp://ocw.mit.edu

14.73 The Challenge of World PovertyFall 2009

For information about citing these materials or our Terms of Use, visit:http://ocw.mit.edu/terms.