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1393: Poverty and Development
Fall 2006
Beatriz ArmendárizLittauer Room 120
Email: [email protected]. 617 495 9142
Office Hours:Tuesdays 9 – 11 & Wednesdays 3 - 4
Overview
Poverty & A Rudimentary Notion of Poverty Line
- Income (< $ 1 or < $2 a day)
- Health (inadequate access, vulnerability…)
- Education (illiteracy, inadequate access & quality)
Development
Enhancement of people’s functionings and capabilities
A. Sen
In this course:
The fundamental goal of economic development:
Eradication of poverty as captured by the MDGs:
1. Reduce by half the proportion of people living in extreme poverty (<$1 a day)
2. Ensure universal primary education3. Eliminate gender disparity in primary and secondary education4. Reduce infant and child mortality by two thirds5. Reduce maternal mortality by three-quarters6. Ensure universal access to reproductive health services7. Implement national strategies for sustainable development in every
country, so as to reverse the loss of environmental resources
1. The Basics:
Poor people (about 1.2 billion, mostly in South Asia and Sub-Saharan Africa) are talented
But:
Very limited access to education, health, credit..
→ Low productivity
→ Low income……..vicious circle or poverty trap
Measures of income per capita across countries and overtime are not accurate.
• Two methodologies:
1) exchange rate method2) ppp method
• Moreover, distribution of income in poor countries is highly unequal
→ poor are twice cursed:
-once for living in countries that are poor on average
-and, again, for being on the receiving end of the high levels of inequality in those countries
(DR, pp. 22 – 23)
An alternative approach:
In addition to Income Per Capita:
1. Life expectancy at birth
2. Educational attainment
→ Human Development Index (HDI) published yearly by the United Nations since 1990.
Seven additional variables related to poverty and underdevelopment
• Institutions• Credit constraints• Aggregate shocks• Population growth• Agriculture• Underindustrialization• Globalization• Environmental degradation
→ Next Class: Growth and Poverty Reduction (WDR 2004, Chap. 1, and DR Chap 3, and Easterly, Chap. 1 - 3).