January 10, 2008

Highlight-Lowlight 2 Poor Countries

Reading the second half of Tim Hartford’s book was definitely an eye opener. In these last six chapters the highlight for me was chapter eight, why poor countries are poor. On page 168-169 I really liked how Harford said “Economist used to think that economic wealth came from a combination of man-made resources, human resources, and technological resources.” The key word is used to, because it is not that way any more, there are a few more pieces in the mix.

These people that are leading these countries are the corrupt individuals that are making these countries poor. There are so many world organizations out there to help these poor countries and Tim Harford made a reference to the World Bank that was put into place after the Second World War to help developing countries rebuild, and improve. What I personally have a hard time with is that, it is known that these leaders are being corrupt and hurting the country, and really stealing from the World Bank and other organizations. They need to be stopped, and I would think somewhere someone would be able to manage where the money is actually going to in the country when grants or loans are given to a country to rebuild. That is a flaw in the system that really should be fixed so these countries don’t get poorer and poorer. So after all is there a chance for development? Wouldn’t the benefit easily outweigh the costs? Tim Harford talks about these issues in these poor countries and gives us the reader a good depiction of the small pieces of the problem.

On page 181, I really liked how Tim Harford closed the story about Cameroon. He said “the lesson of the story might appear to be that self-interested and ambitious people in power are often the cause of wastefulness in developing countries. Self-interested and ambitious people are in the position of power, great and small, all over the world. In many places, they are restrained by the law, the press, and the democratic opposition. Cameroon’s tragedy is that there is nothing to hold self-interest in check.” It comes down to human beings that are hurting these developing countries so bad. I understand that these problems can’t be fixed or turned around overnight, but these countries need to be reformed so they can be pointed in the direction of change for the good! Tim Harford has scene this first hand when traveling to Cameroon. There are many developing countries that need a little push in the correct direction, and it can be done, we have scene Taiwan, South Korea and China turn there economies around. Reading this book has really put a great perspective on economic issues, there are ten wonderful chapters in this book and each of them just touch the tip of the whole issue, but as a reader it was great to see the value these things can have in everyday life.

1 comment:

Larry Eubanks said...

Think a bit more about your thoughts about fixing the corruption and setting the countries in the right direction. Which people in these countries are the corrupt people?

Mancur Olson, in his book Power and Prosperity, explains that he finds there are some necessary conditions for economic prosperity: strict enforcement of private property, strict enforcement of voluntary contracts, and a lack of predation. It seems that the poor countries of the world are poor because these necessary conditions are not met. In other words, in these countries government does not enforce private property, nor does it enforce contracts well, and in fact, government in these countries are very good predators.

If this is correct, then what would it take to set these sorts of countries on the path to prosperity?