Foreign aid to Africa has turned the continent into a ‘giant welfare state’ and is one of the direct causes for the rise in poverty rates from 11% to 66% in recent times.
This is according to African author and economist Dambisa Moyo as she adds her voice to the growing group of learned economists calling for an end to foreign aid to Africa.
An interview with Moyo, for the magazineÂ Guernica, offers a new way to look at foreign aid and its impact on the receiving country and peoples.
I think the whole aid model is couched in pity. I don’t want to cast aspersions as to where that pity comes from. But I do think it’s based on pity because based on logic and evidence, it is very clear that aid does not work. And yet if you speak to some of the biggest supporters of aid, whether they are academics or policy makers or celebrities, their whole rationale for giving more aid to Africa is not couched in logic or evidence; it’s based largely on emotion and pity.
via Arts and Letters Daily
‘Creative capitalism‘ is a term popularised by Bill Gates at the World Economic Forum in Davos, 2008. Here Gates delivered a speech sayingÂ that many of the world’s problems are “too big for philanthropy” and that the free-market capitalist system itself would have to solve them.
Creative Capitalism: A ConversationÂ has a transcript of Gates’ speechÂ but it also has much, much more: it is also “a collection of essays and commentary on capitalism, philanthropy and global development” by many of the most popular economics writers aroundÂ (although the site is now archived as the book has been released).
Michael Kinsley, columnist at Time and author of the book based on the site, discusses the project in a Microsoft Research program that, unfortunately, looks interesting but I can’t watch due to browser restrictions on my current computer.
I’ve already noted the correlation between a low IQ and poverty, but now The EconomistÂ has a summary of how poverty and stress affects the brain.
The reduced capacity of the memories of the poor is almost certainly the result of stress affecting the way that childish brains develop. [â€¦]
To measure the amount of stress an individual had suffered over the course of his life,Â [â€¦]Â researchers used an index known as allostatic load. This is a combination of the values of six variables: diastolic and systolic blood pressure; the concentrations of three stress-related hormones; and the body-mass index, a measure of obesity. For all six, a higher value indicates a more stressful life; and for all six, the values were higher, on average, in poor children than in those who were middle class.Â [â€¦]
The capacity of a 17-year-old’s working memory was also correlated with allostatic load. Those who had spent their whole lives in poverty could hold an average of 8.5 items in their memory at any time. Those brought up in a middle-class family could manage 9.4, and those whose economic and social experiences had been mixed were in the middle.
In an article where the somewhat controversial philosopherÂ Peter Singerâ€”author of Famine, Affluence and Moralityâ€”argues thatÂ the teaching of the issues surrounding world poverty should not be confined to specialist courses and should be an educational priority*,Â I was shocked by the clarification of something I’ve oft wondered about the definition of poverty:
The World Bank defines extreme poverty as not having enough income to meet the most basic human needs for adequate food, water, shelter, clothing, sanitation, health care, or education. One widely quoted statistic is that a billion people are living on less than one U.S. dollar per day. That was the World Bank’s poverty line until 2008, when better data led to a new poverty line of $1.25 per day. As a result, the number of people whose income puts them under the new poverty line is 1.4 billion.
On hearing the “$1.25 a day” figure, the thought may cross your mind that in many developing countries it is possible to live much more cheaply than in industrialized nations. But the World Bank has already made that adjustment in purchasing power, so those it classifies as living in extreme poverty are existing on a daily total consumption of goods and servicesÂ â€” whether earned or homegrownÂ â€” comparable to the amount of goods and services that can be bought in the United States for $1.25.
via Arts and Letters Daily
The original article has, since posting this, gone behind a paywall. Similar information can be found in Random House’s excerpt of his Singer’s latest book, The Life You Can Save.
Matt Ridleyâ€”author ofÂ The Red Queen, among othersâ€”discusses the causes of poverty and prosperity, offering new (to me) insights on innovation, technology and markets.
Itâ€™s very clear from history that markets bring forth innovation. If youâ€™ve got free and fair exchange with decent property rights and a sufficiently dense population, then you get innovation. […]
The only institution that really counts is trust, if you like. And somethingâ€™s got to allow that to build. […]
But human beings are spectacularly good at destroying trust-generating institutions. They do this through three creatures: chiefs, thieves, and priests.
via Arts and Letters Daily