How do we help ‘poor countries’?

There is often a lot of discussion around foreign aid and charity programs to help countries where the majority of the population lives below the poverty line. The behavior of people, who struggle to meet their basic needs, is also scrutinized. Those who do not live under such circumstances might say things such as: ‘why don’t the poor just stop spending so much money, if you didn’t buy that TV, you would be able to buy food!’. However, their situations are far more complex than we can imagine. Furthermore, we make different economic decisions under different circumstances.

Banerjee and Duflo wrote an intriguing book on this subject, Poor Economics. They rely on anecdotal stories, random controlled trial experiments, and historical events to explain what it is like living on less than $1 a day. The authors also discuss how these people can be helped to live a more prosperous life. While there are many (government) programs to aid poor people to at least attend elementary school, it doesn’t give them all the required information to successfully participate in society. For instance, the knowledge of immunizing their children, or which politician to vote for doesn’t reach these people. Second, they have to go the extra mile to achieve a healthy life. Many of us in the Western world have access to sanitary facilities, clean drinking water, and we’re familiar with and have access to preventative measures to stay healthy. We don’t have to think twice about these things. We don’t have to add chlorine to our water after visiting the water pump.

The authors list many more findings of how the decisions might not make sense at face value, but when you take a better look, the reasons for their decisions become clear. Banarjee and Duflo talk about the functional and dysfunctional social policies that have been implemented as well. I find this book encouraging as the authors ensure that there is a lot that can be done in order to help those in need.


Why nations fail?

In a previous post, I discussed the book Collapse by Jared Diamond. In this book, Diamond discusses how societies fall apart and cease to exist due to a number of different factors. Most of the factors relate to biological causes, for instance, deforestation and a rapid growth in population. However, Acemoglu and Robinson argue that there are different determinants that contribute to a society’s downfall.

In their book, Why Nations Fail, they discuss that the determinants have to do with the institutions that are present in a nation. There are two types of institutions, inclusive institutions, and extractive institutions. Inclusive means that citizens have political freedom and can partake in political decision-making in one way or another. Extractive would mean that citizens do not have such freedom and that their country is ruled by someone who has (close to) absolute power.

They further expand this theory as to say that inclusive institutions lead to prosperity, while extractive ones do not. In nations with inclusive institutions, there is an incentive and freedom to engage in being innovative. The authors show that many of the greatest inventors lived in societies with inclusive institutions. This will lead to overall prosperity in a society.

What makes their explanation of their thesis so interesting is the fact that they provide many historical examples to back up their claims. The authors also refute other previous claims made by other scientists before them. These include geography, culture, and ignorance. Acemoglu and Robinson clarify that nations aren’t historically determined to have one of the two types of institutions, but most if it relies on contingency.


Is America’s justice system fair?

After seeing Chris Hayes discuss his new book, A Colony In A Nation, on The Daily Show, I had to read it. The book opens with an interesting internal dialogue by the author. He recalls the last time he called the cops. A couple was arguing outside and was ‘disrupting the order in the neighborhood’ He reflects on his reasons for calling the authorities. Was it because he wanted to protect the woman in question? Or did he want the disorder to go away?

This introduction is an interesting prelude to Hayes’ thesis later in the book. He takes on a journey through history in terms of the formation of the justice system in America. Even now, a part of the population lives in the nation and the rest lives in the remnants of the colony. The system still hinders people of color. They have the right to fear the police since they don’t function to serve and protect them. We can listen to anecdotal stories of people who have been stopped by the police for trivial reasons, we know that their skin color and the neighborhood they’re from probably heavily influence their reasons for being stopped. However, if this isn’t enough evidence for you, Hayes makes use of statistics to back up his claims.

Hayes discusses all the issues related to the present justice system, police brutality, dysfunctional policies, using fines to get funding, neighborhood segregation, and much more. It’s an interesting read, as many claim: ‘before the law, we’re all equal’. But in reality, this is not the case, as old colonial workings are still at play.