This is a series from our writers Holly Narey and Michelle Gonzalez Amador who are taking Jeffrey Sachs’ online course The Age of Sustainable Development. They will be sending out an update on the course every week. Click here for more on all our writers. Check this tag to see all posts on this topic.
A major problem with running a course in this style, with all studying being done by a distance across an abstract platform, is that it’s easy to let life get in the way. This is clearly evidenced by the near three month hiatus in this review series.
This week we were introduced to the concept of “clinical economics”, and a lot of the discussion related to factors that influence whether their economies grow rapidly or they stagnate. Sachs brings in relatable anecdotes to help make the observer understand the underlying concepts behind this potentially overwhelming topic. To treat the weaker economies in the world as a doctor would treat an unknown disease, to treat it as an individual combination of symptoms with the realisation that not all causes are the same, it is possible to diagnose on an individual basis, and therefore treat as appropriately as possible.
This recommendation of a clinical approach to make a differential diagnosis on the state of different economies requires a checklist of seven items. These are detailed in Sach’s book, The End of Poverty, which are given very simply here:
- A poverty trap
- Economic Policy Framework
- Fiscal Framework and Fiscal Trap
- Physical geography
- Influence on disease burden
- Influence on transport and trade
- Influence on agriculture
- Governance Patterns and Failures
- Is there corruption?
- Cultural barriers
- International relations
- Post-colonial nations
Each country’s pattern of any or all of these factors is always unique, completely distinct and due to each other factor it requires individual treatment. Social, cultural and historical factors can change the entire game. Just as a medicine used to treat polio will not be effective in treating TB, the “medicine” used to help countries with struggling economies must be tailored to the cause of the problems, not just the symptoms.
Economies, to remain healthy, require roads, trade, electricity, access to basic healthcare to reduce disease risk, and education. This cannot always be afforded by the poorest countries, but they may be well aware of what investments are needed to be made to improve this economic health, and simply lack the resources to make this a reality. They could, in theory, borrow the money and pay it back once they improve sufficiently, however despite the fact that these loans may lead to the very development that would have made them eligible for this loan, as they are still in poverty they often will not be given it. The alternative to this is aid (an obviously extremely controversial topic). Using this aid alongside targeted investment, improvements can be seen. However, until the initial method of diagnosis is developed, the investment and treatment can only go so far.
The significance of physical geography in determining the economic growth of a country was highlighted. It can be a beautiful and valuable asset, however it can also prove a barrier to trade and growth that could lead to development of infrastructure that would make this easier to overcome. Looking at the distribution of GDP per capita across the globe, correlations can be seen between lower incomes and more challenging physical barriers. It is also seen in the distributions of large cities across the globe, most of these are seen along coastlines, and those further inland are often situated near to larger rivers to allow ease of access to water for survival and trade. Countries such as Russia where the cities are often far from the nearest ports are at a disadvantage. Many African countries suffer from the same handicap, with most of the centre of tropical Africa being landlocked, far from ports.
These countries require access to resources such as coal, and this must be transported from its source to where it can be utilised. There is very little coal in tropical Africa, whereas a lot can be seen in countries that are already comparatively affluent, such as the United Kingdom, and many countries in Western Europe. During the huge explosion of industry in the 18th and 19th centuries, distance from these coal resources made the import of coal for transport too costly to develop this infrastructure that would surely have benefited the country today.
Countries distant from fossil fuels have historically suffered by being left behind by local energy resources, however the dawn of renewables, especially solar energy, will give these countries, many of which receive a lot of solar energy a year, a long overdue opportunity for energy independence.
The questions given for this section appeared to change. Instead of referencing what had been explicitly mentioned in the lesson, they referred to topics brushed over minutes before or details easily missed. Occasionally, they were placed before the facts were given, as long as these were things that viewers should have been able to answer in light of the contents of previous sessions. This was in fact a welcome change, as the whole thing has started to become more challenging, and the ability to answer swiftly becomes more rewarding.
In highlighting the complexity of all the issues, Sachs also references the fact that there are so many different people working within this field, each implementing different and often contrasting strategies to help aid economic growth, which can lead to reduced effectiveness. The importance of a conceptual framework developed from each individual state of affairs was a key message of this session, and the need for more cohesive action by professionals in the development field was emphasised.
This session moved on from “doom and gloom” and was a great introduction to methodologies that could really lead to positive change. In following sessions these will be discussed in more detail, but with so many people focussing on economic cures, this week’s series of lectures effectively highlighted how critical it is to have a robust method of diagnosis before any progress can be made.