H388 Presentations 12/05/06

INTERNATIONAL ECONOMY

• 13. CJ Dreissen – free trade• 14. Zachary Roberts –trade policy• 15. Trung van Truong – remittances

REGIME TYPE

• 16. Carlos Torres – gender• 17. Scott Johnson – corruption• 18. Benjamin Newton – corruption

MICRO-ECONOMY• 19. Miles Hammond – micro-credit• 20. Susan Krissel – gender/health• 20. Margaret Knowles –

credit/health

MACRO-ECONOMY• 21. Alfonzo Salazar – Sanctions• 22. Bruno Valle – Debt relief • 23. Han Zhao – Struct Adustment

Chile: Trade and Equality 1990-2002

C.J. Driessen

Exports by Year

$0

$5,000

$10,000

$15,000

$20,000

$25,000

GoodsExported

Imports by Year

$0

$5,000

$10,000

$15,000

$20,000

$25,000

GoodsImported

Income Re-DistributionBy Region

-15%

-10%

-5%

0%

5%

10%

-30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0%

Top 5th vs.Bottom 5th

Middle Class Gains

Middle Class Loses

Rich gain at Poor's Expense

Poor gain at Rich's Expense

Income Distribution

$11.0

$11.5

$12.0

$12.5

$13.0

$13.5

$14.0

$14.5

1990 1992 1994 1996 1998 2000 2002

Top 5th/Bottom 5th

Gini Coefficient

44.0%

44.5%

45.0%

45.5%

46.0%

46.5%

47.0%

1990 1992 1994 1996 1998 2000 2002

Gini

Real GDP by Year

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

GDP at1996Prices

Destitute Percentage

-

2

4

6

8

10

12

14

1990 1992 1994 1996 1998 2000 2002

Destitute %

Poverty Percentage

-

5

10

15

20

25

30

35

40

45

1990 1992 1994 1996 1998 2000 2002

Poverty %

Inequalities in World Food Trade

Zachary Roberts

December 5

• Agricultural trade is much more important in developing countries vs. developed countries. In Ethiopia, agriculture is 47.5% of GDP, versus 0.5% of GDP in the United Kingdom. 80% of Ethiopia’s population works in agriculture vs. 1.5% in the United Kingdom.

• African producers can grow food more cheaply than in Europe and the U.S., so the West supports the agricultural industry with an average of $238 billion in subsidies between 2001-2003.

• This does not include countless tariffs and quotas on imports from developing countries, including Sub-Saharan Africa

• With a complete liberalization of food trade, there would be a $300 billion increase in food trade per year by 2015.

• Developing countries would account for 45% of this gain, which is highly disproportionate to their share of global GDP.

Example: Cattle Trade

• Europe’s tariffs on beef make it profitable only to export high-quality beef, so poor producers who cannot produce such quality beef are cut out of the trade. This also causes a lack of quality beef on the domestic market, which depresses domestic market prices, leading to lower income for cattle herdsmen.

• Also, foot and mouth disease standards for European exports cannot be met by the vast majority of African producers. The IMF estimates that African cattle herdsmen lose $1.3 billion for every European life saved by these measures.

African Liberalization

• The problem is not entirely Western. Up to half of the gain that would be realized in production and income from trade liberalization would result from a liberalization of trade by the African countries.

• Example: After Zambia lifted restrictions on maize exports to Europe, hybrid grain producers saw an increase in income from the new market access.

Migration, Remittances, and Poverty Alleviation in Egypt

Trung Van Truong

HIST 388 Hunger And Poverty in the Market Economy

December 5, 2006

Problem

• Relations between migration, remittances, and poverty alleviation

• Definitions• Situation around the world and Egypt• Why are people immigrating?• Where do remittances go?• Do they really help the economy and alleviate

poverty in Egypt and other places around the globe?

Findings

• Limited Data Set• Need to extend scope• Problematic; receiving countries are OECDs• IMF Records versus Stark and Adam’s findings• Some signs of poverty alleviation from

remittances• Development of infrastructures in the developing

countries

Data Set

Parity, Polity and Equality

Carlos Torres

December 5, 2006

History 388 - D. Ludden

Terms

• Parity - measure of the gap between HDI and GDI scores for a country.

• Polity - score given by the Polity IV Project.

• Equality - here, within society, measured by the Gini coefficient.

• Social Investment - government expenditures in public provision of goods such as education and health care.

Problem

• Many of the characteristics of gender parity are those commonly associated with liberal democracies. Is there a correlation between Democracy and parity, or are there other forces at work?

• WB says the former, but there are important errors in their historical analysis of institution building.

WB Report

• Stresses the importance of institutionalized structures to maintain equitable distribution of wealth and income.

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• But they get the distributive mechanism backwards

• American case study– Depend on the presence of “authorities” (112) that

didn’t exist in the colonies.– Pretend that a preexisting social/institutional

structure came from Europe with the settlers, but that isn’t exactly what happened.

– Brought a system of government for their internal community of settlers, but institutions were set up in response to distribution of resources in general.

– Even Mayflower Compact, universally recognized as the first institutionally directive document in the New World, mentions nothing more than “binding together” for the “general good of the colony”

• Curiously, the only time they seem to make this mistake is when they are talking directly about institutional formation (and implying a production mechanism of democratic political process).

• Otherwise, they recognize equity as the driving force in the creation and maintenance of institutionally equitable structures, such as property rights, habeas corpus, etc…– “threats of social disorder” (from a powerful public)

force democratic reform; “egalitarian distribution… eased the transition to Democracy” (114), among others

Evidence Polity v. Parity

R2 = 0.0655

0

0.005

0.01

0.015

0.02

0.025

-10 -5 0 5 10 15

Polity Score

HD

I -

GD

I

Gini v. Parity - World

R2 = 0.1924

0

0.005

0.01

0.015

0.02

0.025

0 10 20 30 40 50 60 70 80

Gini Coefficient

HD

I -

GD

I

Stability v. Parity

R2 = 0.1646

0

0.005

0.01

0.015

0.02

0.025

0 2 4 6 8 10 12

Absolute value polity score

HD

I -

GD

I

Stability is introduced to control Stability is introduced to control for how the polity score is for how the polity score is determined, but is still a less determined, but is still a less accurate determinant than the accurate determinant than the Gini coefficient. Pattern holds Gini coefficient. Pattern holds true across population levels, true across population levels, GDP and HDI levels and regime GDP and HDI levels and regime typetype

Institutional Formation

Reality:

(Cash Input) (Outcome) (Results)

Health Economic Situation

Education >> - wealth >> Power >> Institutional Direction --|

Services - income |

^------------------------------Distribution--------------------------------------------- |

Cash can only influence cash inputs, everything else has to flow out of the system organically. The cash inputs are the base of the causation chain, and an imbalance anywhere else will not create a self-sustaining shift without the cash inputs balancing as well. Institutions take time to develop and the build up of equity is a fairly slow process (45) pointing to a cause that is difficult to influence on a broad scale and must be done in the long run, rather than an instantaneous mechanism like policy or polity change.

Point is, they’re looking at the evidences of institutional problems rather than the causes and advocate in a round about way for ‘hollow’ democratic reform while simultaneously stressing the importance of solid infrastructure in maintaining equitable institutions (equitable social structures in the community, rather than imposed by the government, are the ones that last).

- “Morally irrelevant” (19) categories like race, religion and gender are evidence of institutionalized inequalities, but not causative in themselves

- Income, too, is evidence of unequal opportunity, but not wholly causative in itself, either

- Concentration of reproductive wealth, and the power that comes from it from consequent distributions of investment in social capital (education, health care…), is the real source of distribution of power

- The only way to fix the distribution of wealth is to correct the social investment disparities (34, 45) - education, health, credit availability, labor opportunities, etc…

Problem with WB approach

• Advocates targeting institutions that create equitable distributions of wealth and opportunity even while it acknowledges that without the underlying infrastructure such efforts are doomed to failure.

• There is no particular pattern, only a series of correlations that are more or less accurate in different situations, because the peculiarities of each country’s history cause disparities in social investment in different ways.

Solutions• Realize that systems of inequality are

only correlated with certain demographic indicators and institutions, and that fixing inequalities, while targeting particular populations, involves correcting social investments, not artificially changing institutions without developing the infrastructure that supports those democratic institutions.

Measuring Measuring CorruptionCorruption

Scott JohnsonScott Johnson

• Corruption Perception Index (CPI)Corruption Perception Index (CPI)

• International Country Risk Guide (ICRG)International Country Risk Guide (ICRG)

• International Crime Victim Survey- International Crime Victim Survey-

Bribery (ICVS)Bribery (ICVS)

• Corruption Control Index (CC)Corruption Control Index (CC)

IndexesIndexes

8.1%8.1%

12%12%

15.3%15.3%

8%8%

7.7%7.7%

8.6%8.6%

World Average rGDP growth rate: 2.87%World Average rGDP growth rate: 2.87%

Global Corruption and on the Perpetuation of Domestic

Poverty

Benjamin Newton

Benjamin Newton

Introduction: Global Corruption

• Global corruption is the rule and not the exception

• In 2006, ¾ of Corruption Perceptions Index (CPI) states scored below a “5”

• Dysfunctional states share characteristics

• Negative implications vary from state to state

• Poor states get “stuck” in poverty

Research Methodology

• Corruption measurements are a modern phenomenon

• Mixed Approach

• Qualitative and Quantitative uses

• Case sensitivity

Case Studies

• Corruption varies in different parts of the world

• Public vs. private sector corruption

• Some states do not have the luxury of dealing with corruption

• States who see the benefits in fighting corruption will do so

Why is this Important?

• Globalization is an inevitable force

• Corruption serves as an inhibitor to progress

• If the Global Development movement is serious, corruption will have to be effectively tackled

• Efforts to curb corruption will have to be case sensitive

Micro Finance and Family Dynamics in Bangladesh

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Miles Hammond

Important Facts About Bangladesh

• Population (2006): 147,365,352 (7th largest)• Densest pop. excluding small islands and city states• Almost 1/2 of the population lives below the poverty line• 10-15% of the population faces life-threatening nutritional risks• Per capita GDP: US $1870• Per capita income: US $440• Women hold 2% of parliamentary seats, make up 25% of professional and

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How Do Micro Finance Organizations Like Grameen Bank Help?

• Founded in 1974 by Muhammad Yunus• Gives small loans to rural women to farm

and start cottage industries• 6.61 million current borrowers, with over

50 million borrowers since inception• Empowerment groups• Sixteen decisions

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The Empowerment Index

• Resources

• Finance

• Transaction Management

• Mobility and Networks

• Activism

• Attitudes and husband’s behavior

• Family planning and parenting issue

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HDI Index suggests that Bangladesh is not doing particularly well…

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The Problems

- Reach insignificant portions of the poor population - Not financially viable - despite the hype- Target insignificant industries- Cycle of debt - burden falls on women- NGOs prop up existing social institutions- Ethical debate over ‘sixteen decisions’- Promote poor business practices- Distract funds and attention from more effective forms of aid

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Programs to improve maternal and child nutritional status

Susan Krissel

Examples of Interventions

• UNICEF– Fortification of food (ex. Iodization of salt)– Supplemental micronutrient formula with RDIs

for pregnant/lactating women– Education for the empowerment of women– Baby-Friendly Hospital Initiative– International Code of Marketing of Breast Milk

Substitutes

• Earthwatch– Educate women about nutrition and hygiene as

related to disease prevention– Involve and train community members/leaders– Make community self-sufficient

• Canada Prenatal Nutrition Program– Supplementation– Community gardens– Gift certificates to buy healthy food– Cooking demonstrations and shopping tours– Nutrition and Health Awareness Education– Budgeting workshops– Breastfeeding incentives

Conclusions

• Various types of organizations are taking action to improve maternal/child nutrition

• These organizations are mainly focused on improving malnutrition through nutrients, rather than targeting its causes

Improving Women’s Health through Micro-credit: Cases of

BRAC in Bangladesh

Margaret Knowles

December 5, 2006

• Two separate studies suggest that participation in the Bangladesh Rural Advancement Committee’s (BRAC) micro credit program has led to significant increases in maternal health knowledge and child survival rates

• Can these effects be attributed to the micro-credit program’s success or have other factors played a role?

• What components of the program are truly influencing health of these women and their children?

Study conducted by the Research and Evaluation Division of

the Bangladesh Rural Advancement Committee (BRAC):Women's Knowledge of Prenatal Care among Credit

Forum Participants

48.3

7.6

1.7

64.9

13.2

5.3

62.6

15.911.2

6.5

17.7

63.7

0

10

20

30

40

50

60

70

Tetanus vaccines Vitaminsupplementation

Medical check up

Categories of Prenatal Health Measures

Pe

rcen

t Non participant

Participant <5 yrs

Participant ≥5 yrs

not eligible

Women's Knowledge of Postnatal care, BANGLADESH

38.9

11.9

56.1

80.4

45.8

60.2

43

78.8

55.6

43.5

79.8

57.3

0

10

20

30

40

50

60

70

80

90

EPI doses DiseasesPrevented

Child Survival

Health topic

perc

en

t Non participant

Participant <5 yrs

Participant ≥5 yrs

not eligible

Joint project between BRAC and the International Centre for Diarroeal Disease Research, Bangladesh (ICDDR,B)

Predicted hazards of infant death during pre- and post intervention period by mothers participation in

development programme, Matlab, 1988–97.

Findings:

• Participation in BRAC micro-credit program has a positive impact on health knowledge, reducing and even preventing risks of child mortality

• Success cannot be attributed solely to the increase in income and economic participation among the woman participants.

• Micro-credit forums play a role as a form of media to reach women with health information

• Requirements of participation in the program insist that participants receive basic health services and participate in forums and educational activities in order to continually acquire loans and credit.

• BRAC uses a multifaceted approach to alleviate poverty and

empower the poor women of Bangladesh.

Economic SanctionsAgainst Iraq

Alfonso Salazar

UNSC Resolution

• On August 6, 1990 the United Nations Security Council implemented Resolution 6611) banned all imports from Iraq and Kuwait2) banned all exports except medical and food supplies3) froze Iraqi government funds held abroad

• Sanctions on Iraq held in one form or another until the Iraq War of 2003

Impact of Sanctions

• Immediate economic declineDecreases in GDP

HyperinflationCollapsed exchange ratesUnemployment

• Humanitarian StrugglesDecreases in Purchasing Power for Food

Growing overall Mortality ratesDeclining access to necessary resourcesIncreases in poverty rate

Sanction Affects on Trade

• Iraq dependent on oil export revenuesOil Rev US$ billion GDP US$ billion

1980 26.3 53.91984 9.4 35.11990 9.6 16.41992 0.5 11.9

• Civilian Imports1988 3.6 billion dollars1990 2.8 bill1992 0.6 bill

Up to 1990 domestic food production represented one third of total consumption for essential food items. Import dependent economy

Personal Income

• Collapse of Iraqi economy seen from per capita GDP measured in 1980 prices.

• 1980 $40831988 $1756 Per capita does not take into account

1990 $906 inequality among households

1991 $627

1994 $342• Food purchasing power of private income

declined to 5-7% of its August 1990 level.

Food Prices Aug. 90 Aug. 91 Percentage

increase

Wheat flour 0.05 2.42 4,431

Powdered milk 0.75 27.33 3,561

Sugar 0.20 4.42 2,108

Cooking oil 0.48 10.33 2,038

Rice 0.23 4.08 1,701

Tea 1.70 23.67 1,292

Food Basket for

Family of six 66.0 1,010.00 1,446• Prices continued to soar. In 1995, a kg of rice cost 1,184

ID. Unsustainable entitlement exchange

Total Deaths from Specified Health Conditions

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

1989 1991 1993 1995

Children under 5

Population above 5

•Republic of Iraq, Baghdad: Ministry of Foreign Affairs, 2000

Government Solutions

• In response to sanctions, Iraqi government instituted food rationing system covering wheat flour, rice, sugar, tea, cooking oil, and children’s powdered milk.

• The ration system provided 1,270 calories per day per person.

• Dietary intake in the late 1980s averaged 3120 calories per day.

• While the program somewhat prevented starvation, chronic hunger remained prevalent.

Do World Bank and IMF PRSP-based Economic Guidelines Hamstring Debt Cancellation and Poverty Deduction?

Bruno Valle

SAP = Structural Adjustment Programme

PRSP = Poverty Reduction Strategy Papers

Malawi

Malawi External Debt Over Time

0.00

500,000,000.00

1,000,000,000.00

1,500,000,000.00

2,000,000,000.00

2,500,000,000.00

3,000,000,000.00

3,500,000,000.00

4,000,000,000.00

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Year

US

$

Series1

Malawi Life Expenctancy At Birth Over Time

37

38

39

40

41

42

43

44

1995 1997 2000 2002 2003 2004

Year

Yea

rs o

f L

ife

Series1

Zambia

Zambian External Debt Over Time

0.00

1,000,000,000.00

2,000,000,000.00

3,000,000,000.00

4,000,000,000.00

5,000,000,000.00

6,000,000,000.00

7,000,000,000.00

8,000,000,000.00

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Year

US

$

Series1

Zambian Life Expectancy at Birth Over Time

35.5

36

36.5

37

37.5

38

38.5

39

39.5

40

40.5

41

1995 1997 2000 2002 2003 2004

Year

Yea

rs o

f L

ife

Series1

Trade Liberalization and Developing Nations

Miracle Tonic or False Elixir?

Han Zhao

HIST388 Fall 2006

What is Trade Liberalization?

Trade Liberalization = Dual-Sided•Responsibilities of Developed Countries •Responsibilities of Developing Countries

What is it supposed to do? •Specialization => efficiency in markets and lower costs•Competition from abroad as stimulus

…should lead to… demand, growth, employment

BUT does it really do all that???

Some Analysis

GDP Growth vs. Consumption per Capita vs.

Trade Openness Trade Openness

Correlation: .09201 Correlation: -.2071

100

200

-15

-10

-5

0

5

10

15

openness

100 200

growth rate

/ capita

-15 -10 -5 0 5 10 15

50

60

70

80

90

100

200

consumption

50 60 70 80 90

openness

100 200

What are its real effects?

“Review of the evidence of links between trade

liberalization and economic growth concluded there is no

clear causality” – Alan Winters

• Case Studies from SAPRIN

- Philippines, Ecuador, Bangladesh, Hungary, Mexico…

• Trends among countries: benefits to exclusive sectors, imports-exports imbalance, price shifts, loss of tariff revenues and losses to agriculture and manufacturing

• Most of case countries displayed LOSSES due to trade liberalization as poor bear the brunt of trade adjustment policies