Tuesday, February 12, 2008

Helping the poor

I second Arya Gaduh's postcript note that:

[I]t's about time Indonesian politicians start to think in a systematic way about policy support for the poor that minimizes the incentives to the broader economy. I think this can be done -- for all its faults, especially as a program designed and implemented in such a short time, the cash transfer program was relatively successful in achieving such an objective. It's high time that we think of such programs, especially given the expected global food price hikes.

While we're at it, I should mention that I agree with Becker's recommendation that

[T]here are far more effective ways to help poor nations of Africa and elsewhere speed up their rates of economic development and reduce the impact of malaria, Aids, and other devastating diseases. Probably the single most important step is to encourage much more market-friendly policies by African and other governments in poor countries. In addition, it would help to reduce, better still eliminate, tariffs by rich countries on the agricultural and other exports from developing countries, encourage more widespread use of DDT and mosquito netting in combating malaria (see my post on deaths from malaria on Sept. 24, 2006), and provide private and perhaps public subsidies to the development of new drugs that help fight diseases mainly found in poor countries.

Of course, next is to translate that into actions. For which, Dani Rodrik's superb new book may provide good insights.

8 comments:

Anonymous said...

Sukardo Ronaldo says:

Agreed

Daniel Suryadarma said...

Whenever I read what Becker has to say about African countries, I remember Peter Griffith's The Economist's Tale and Naomi Klein's The Shock Doctrine.

Maybe I've been reading the wrong books. Or maybe Becker is not always right.

Aco said...

For sure, Becker is not always right. But I don't think he totally wrong on this one. And to my recollection -- or lack thereof -- Becker didn't write or say much about African countries: let me know what I missed. I haven't read that Griffith's book. As for Naomi Klein: ah I rest my case :-)

Arya Gaduh said...

Daniel:
If you don't like Becker, what about William Easterly?

"Sure, let those who have become rich under capitalism try to do good things for those who are still poor, as Mr. Gates has admirably chosen to do. But a New-Age blend of market incentives and feel-good recognition will not end poverty. History has shown that profit-motivated capitalism is still the best hope for the poor."

Daniel Suryadarma said...

Guys, I'm not against capitalism or trade.

What I don't get, from my very limited understanding of international trade, is how a country can go from "encourag[ing] much more market-friendly policies " to "reduce, better still eliminate, tariffs by rich countries on the agricultural and other exports from developing countries, encourage more widespread use of DDT and mosquito netting in combating malaria, and provide private and perhaps public subsidies to the development of new drugs."

Becker seems to argue that the latter is caused by the former. I agree with the former. I don't see, however, how the former causes the latter.

Aco said...

Daniel, I'm not sure if Becker implies causation in that sentence -- "in addition" being the operative.

Daniel Suryadarma said...

Aco: okay, my bad. :$ Now I'd better shut my mouth and go get Rodrik's book.

Aco said...

Daniel, thanks for commenting, I hope you care to visit again. Really appreciate your comment. Enjoy Rodrik's book! I especially like the "growth diagnostics" part.