European Politico-economics QA Mega-thread - Page 351

The spread of ideas and the relatively low costs of delivering basic services explain widespread advances in health and education. So why are there still such large differences across countries? And why have so many countries with similar starting points traversed such different development paths? Many answers are country specific—we explore both successful and unsuccessful cases in box 3.3 and box 3.6 later in the chapter—but there are also some general patterns.
Countries with the fastest progress can be split broadly into two groups—those that did well in economic growth and those that did well in human development. Few countries did well in both (among the top 10 movers, Indonesia and South Korea were the only countries to make it into the top 10 in both the income and nonincome dimensions of the HDI; see table 2.2 in chapter 2). So, there are different pathways to development, some emphasizing the expansion of material living standards, and others, health and education.

Different country trajectories
Some development strategies have concentrated on expanding wealth, seeing possible adverse consequences for other aspects of human development as necessary “social costs.” But more inclusive development strategies have greatly improved material conditions without neglecting other dimensions.
Country trajectories can be characterized in a typology of success and failure in human development with four groups: countries with high growth and high human development (“virtuous” development processes), those with neither high growth nor high human development (“vicious” processes), and those successful in pursuing one objective but not both. This characterization echoes Jean Drèze and Amartya Sen’s distinction among “growth-mediated security” (growth with road-based social provisioning), “support-led security” (where direct social action took precedence over growth) and “unaimed opulence” (where growth was the priority).
Most virtuous development processes involve managing distributive conflict; building adequate state and business capacity, with the state having sufficient countervailing power to limit abuse of market power by powerful capitalist groups and resolving sociopolitical contests in favour of broad-based provisioning.
Countries on this path include most of the East Asian successes and the more stable Latin American countries such as Brazil. The vicious processes group includes some countries in Sub-Saharan Africa, such as Côte d’Ivoire, and some countries with higher initial human development, such as the Russian Federation. [...]

Clearly, an amazing variety of institutions are compatible with human progress. We can try to understand how they organize relationships between markets and states. Markets—understood as a form of organizing production that involves extensive private ownership—may be an indispensable component of any economic system capable of supporting the sustained dynamism necessary for transformative changes in most dimensions of human development. But markets do not bring progress in other dimensions of human development, and the evidence suggests that markets are necessary but certainly not enough.
These observations hark back to Karl Polanyi’s exposition more than 60 years ago of the myth of the self-regulating market—the idea that market relationships can exist in a political and institutional vacuum. Markets can be very bad at providing public goods, such as security, stability, health and education. For example, firms focused on producing cheap labour-intensive goods or exploiting natural resources may not want a more educated workforce. And if there is an abundant pool of labour to draw on, firms may care little about worker health. We see this today in lax occupational safety standards in many developing countries. A shift from the institutions of reciprocity that hold sway in traditional societies to market relations can weaken the human and social ties that bind communities. Furthermore, without complementary societal and state action, markets are particularly weak in environmental protection. Poorly regulated markets can create the conditions for environmental degradation, even disaster. A recent example is the oil leak in the Gulf of Mexico in 2010. Such leaks are common: over the past decade there was an average of three or four large oil spills a year, spewing more than 1.5 million barrels of oil. And recorded spills account for only about a tenth of petroleum waste that ends up in the ocean each year. In the Niger Delta endemic oil spills, waste dumping and gas flaring have destroyed ecologically sensitive wetlands, clogged waterways, killed wildlife and damaged the soil and air quality over the past 50 years—ruining the lives of people in the region.

On December 13 2015 22:24 Acrofales wrote:
Your paper is not about the relationship between globalization and poverty. Insofar as it mentions globalization at all and its influence on human development it mentions mostly positive effects. As the only hint of a negative effect, it mentions that globalization brings a higher risk, and that bigger governments are needed to deal with that. Something I don't disagree with at all.

As for the exerpt that you copied and particularly the bit you bolded: yes? This says nothing about globalization, it says something about good governance. Something that is absolutely necessary, I agree.

For example, firms focused on producing cheap labour-intensive goods or exploiting natural resources may not want a more educated workforce. And if there is an abundant pool of labour to draw on, firms may care little about worker health. We see this today in lax occupational safety standards in many developing countries. A shift from the institutions of reciprocity that hold sway in traditional societies to market relations can weaken the human and social ties that bind communities. Furthermore, without complementary societal and state action, markets are particularly weak in environmental protection. Poorly regulated markets can create the conditions for environmental degradation, even disaster. A recent example is the oil leak in the Gulf of Mexico in 2010. Such leaks are common: over the past decade there was an average of three or four large oil spills a year, spewing more than 1.5 million barrels of oil. And recorded spills account for only about a tenth of petroleum waste that ends up in the ocean each year. In the Niger Delta endemic oil spills, waste dumping and gas flaring have destroyed ecologically sensitive wetlands, clogged waterways, killed wildlife and damaged the soil and air quality over the past 50 years—ruining the lives of people in the region.

On December 13 2015 23:03 maartendq wrote:

Why can't it be both? You need institutions, sure, but without competition there is very little reason to develop new technology ("If it is not broken, don't fix it"). China during the 15th century was way more technologically advanced and had huge ships exploring the African coasts even, but after that decided to isolate itself from the rest of the world, allowing the European warring states to gain a technological edge that they are still trying to catch up on.

During the warring period in China there was one region that developed itself into something that resembles a contemporary state (including a bureaucratic apparatus to make taxation more efficient), forcing the others to adopt similar forms of government too or perish. During Europe's warring period we developed new technology and institutions at a breakneck speed.

EDIT: I'd actually go as far as saying that war is a lot more important for technological progress than international trade, unless of course trade incorporates two or more companies from different countries trying to gain a foothold in the same market.

On December 13 2015 23:08 WhiteDog wrote:

Because it is clearly implying that without institutions, capitalists group usually seek ressources and exploit weakness, a situation that does not profit the population. This has been made very clear, since in some countries where the state is too weak, the globalization has had bad effect on development - it's the history of the washington consensus...