Posts tagged with: economic development

The key to creating economic flourishing is economic growth and the key to creating long-term economic growth is to create new ideas. But what is the key to creating ideas that lead to innovation?

Economist Alex Tabarrok says the idea equation goes like this: Ideas = Population x Incentives x Ideas/per hour

This equation is a useful way to lay out the factors affecting idea production, says Tabarrok in the video below. When we understand the factors behind production, then we can better predict how the future will go.

Photo courtesy of Flickr

Photo courtesy of Flickr

It’s a common misconception in public discourse that the global poor are trapped in poverty because of globalization.  We frequently hear things from our public leaders about how markets are crushing the poor.  “The reality is that the poor aren’t dominated by markets. They are excluded from them.” says Michael Matheson Miller in an article for The Stream.

Miller hits on four different problems and misconceptions of how international economic development is currently addressed.  He starts out by explaining how the current system benefits the wealthy and well-connected.

Many of the powerful and wealthy don’t have an economic incentive to build institutions of justice like clear title to land or broad access to the formal economy. They are doing well under the status quo and many of them are actually benefiting from the current situation through connections, access to special privileges, bribes and sweetheart deals on things like mineral rights.

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??????????This week at the Institute for Faith, Work and Economics, contributor James Clark asked, “Can microfinance really help the poor?” His conclusion: yes microfinance can work, but with certain caveats.

In the last decade, microfinance has become a popular strategy in poverty alleviation, yet many economists and philanthropists often call its effectiveness into question. In his article Clark says that “Christians have embraced microfinance as a solution to poverty that helps the poor help themselves, but we must ensure that our efforts are really helping people rather than simply making us feel good.”

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A beautiful day in Grand Rapids, Michigan. | Photo by Steven Depolo, Flickr

Growing up impoverished in the Grand Rapids area himself, Justin Beene brings a unique perspective to his lecture on Community and Economic Development. He has seen first-hand the good intentions behind top-down investing to eliminate poverty and racial injustice, and the consequential damage wreaked upon such communities. Urban cities have largely been developed through three forces: gentrification, pouring resources into them, and community development. Beene asserts that we need to cut off top-down funding and start supporting neighborhoods in solving their own problems. We must do things with its citizens, not for them or to them. Instead of enacting additional programming or conducting further needs assessments, we need to eliminate the “broken vending machine” that is development today, and break the cycle of toxic charity that runs rampant in creating gratitude, anticipation, expectation, entitlement, and dependency among the poor. (more…)

2014-03-19-piggyThe good news is that the pinging sound your car’s engine was making for the last month has finally stopped. The bad news is that the sound stopped because the engine stopped working. You take the car to a local mechanic who tells you it will cost $1,000 to repair.

How would you handle this type of unexpected emergency? Would you be prepared?

Only about 4 in 10 Americans (37 percent) say they would pay for an unexpected expense with savings, a Bankrate survey found. Almost a quarter more (23 percent) say they’d pay for an emergency by reducing spending on other things.

Credit cards would be an option for 15 percent and another 15 percent would borrow from family or friends. That leaves nearly 10 percent who have no idea what they’d do.
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cellphones-povertyFrom mass shootings to terrorist attacks, political incompetence to racial unrest, there has been no shortage of bad news stories in 2015. Death, destruction, and divisiveness tend to dominate the news cycle, leading us to despair over the direction our world is headed.

But our incessant focus on the negative can lead us to overlook or downplay the positive changes that are happening across the globe. That is especially true of the most important good news story of 2015, one few people have heard and fewer have grasped the significance.

The good news: For the first time in world history, less than 10 percent of the global population will be living in extreme poverty.
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consumptionWhat if told you that between 90-100 percent of Americans are living in “healthcare poverty.” You would probably object and say that while the country certainly has a healthcare crisis, my numbers are surely inflated. After all, most people in the U.S. have access to healthcare.

In reply, I explain that while it’s true most people are able to consume healthcare services, they are still in poverty since those services are paid for at least partially by the government or private insurance. You would probably respond that I seem very confused on this issue. And you’d be right.

Yet when we hear reports that between 14 and 16 percent of  Americans are living in poverty, few people bother to ask, “Are they talking about consumption or income?”

The reason it matters is the same reason that most Americans are not in “healthcare poverty”: they are able to consume more goods and services than they are able to pay for with their income. As James X. Sullivan, an economics professor at Notre Dame, has explained:
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