The Ends and the Means of Development

EEOC 35th Anniversary Art Contest Chelsea Lapp, Age 11 Sixth Grade Flying Hills Elementary School El Cajon, CA We have learned much over the past several decades about the connection between gender inequality and economic growth, particularly when we talk about inequalities in education and employment. Inequalities in education, for instance, artificially reduce the pool of talent which societies can draw from; by excluding qualified girls from the educational stream and promoting less qualified boys, the average amount of human capital in a country will be reduced and this will have an adverse impact on economic performance. We also know that the promotion of female education leads to lower births per women, not only because educated women will have greater knowledge about family planning but also because education creates greater opportunities for women that may be more attractive than childbearing. Lower fertility levels help reduce child mortality and ex...

The relationship between growth and income inequality is more complex than the one between growth and poverty, and has been the subject of considerable study. An early contribution in the 1950s by Nobel Prize-winning economist Simon Kuznets, for instance, noted that at least two forces tended to increase inequality over time. One was the concentration of savings in the upper-income groups; he observed that in the United States the wealthiest 5 percent of the population accounted for close to two-thirds of total savings. A second factor, which has been a universal characteristic of development over the past century, was the gradual shift away from agriculture. Between 1991 and 2001, for instance, more than 8 million people left agriculture in India. Between 1965 and 2000 the share of the labor force employed in agriculture fell from 49 to 21 percent in Brazil, from 26 to 5 percent in Japan, from 55 to 11 percent in Korea, from 81 to 47 percent in China, and it fel...

Augusto Lopez-Claros & Valeria Perotti The transformation of Japan into a modern economy at the end of the 19 th century is a tale of culture and cultural change. The centuries-long transmission of values like honor, loyalty, duty, obedience and discipline in the bushido (the code of conduct of the samurai) contributed in fundamental ways to shape Japan’s human capital. However, a change in mindset – triggered by the personal influence of key political figures – needed to happen in order for the country to devote its efforts to economic development. Japan’s 250-year old feudal shogunate collapsed in 1867-68 and power returned to the emperor in Kyoto. The Home Minister appointed in 1873, Okubo Toshimichi, was relentless in the recruitment of talent for his Ministry, believing that promotions should be based on merit rather than family or military connections, and that those trained abroad were particularly well-suited to assist him in his efforts to launch Japa...

In our earlier blogs on corruption we have looked at the causes and consequences of corruption within the process of economic development. In our last blog, Six Strategies to Fight Corruption , we addressed the question of what can be done about it, and discussed the role of economic policies in developing the right sorts of incentives and institutions to reduce its incidence. This blog will provide some thoughts on the moral dimensions of corruption. In his erudite and all-encompassing study of bribery through the ages, Noonan ( 1984, p. 700 ) observes that “the common good of any society consists not only in its material possessions but in its shared ideals. When these ideals are betrayed, as they are betrayed when bribery is practiced, the common good, intangible though it be, suffers injury.” Bribery and corruption—however much the experts may wish to disguise them in the language of costs and benefits and economic choices—have a moral dimension. We ignore ...

The 2008-2009 global financial crisis led to a number of large–scale government interventions across the world. These included massive provisions of liquidity, the takeover of weak financial institutions, the extension of deposit insurance schemes, purchases by the government of troubled assets, bank recapitalization and, of course, packages of fiscal stimulus, sometimes of a scale not seen since World War II. Even the IMF, the world’s traditional guardian of sound public finance, came out strongly in favor of fiscal loosening, arguing through its managing director that “if there has ever been a time in modern economic history when fiscal policy and a fiscal stimulus should be used, it's now” and that it should take place “everywhere where it's possible. Everywhere where you have some room concerning debt sustainability. Everywhere where inflation is low enough not to risk having some kind of return of inflation, this effort has to be made. ” One can ar...