Saturday, October 6, 2012

The Next Convergence - Part 1

Part 1 The global economy and developing countries
1. 1950: the start of a remarkable century
2. Static views of a changing world
3. Postwar changes in the global economy
4. The origins of the global economy
5. Economic growth
6. Common questions about the developing world and the global economy

Part 1 is an excellent introduction and framing of the questions posed in the introduction. In particular, chapters 2 and 5 are important and presented in an accessible manner for students of social sciences.
The final paragraph on page 17 provides an insight into a question that our book group has raised during a number of meetings and that continually reflect upon - How do beliefs persist that seem to be in conflict with the world, for example, minimum wage other price controls effectively address questions of economic welfare.

Spence concludes chapter 2:

"Our natural instincts to look for a villain, some human constraint that held in place . . ." I do think that he is on to something here, the notion that there is someone or some organization to blame and the natural follow on to this belief is that there can be a correcting agent - the state, other institutions, or an individual or group of enlightened elites - that can slay the villain and "fix" the problem.

Spence goes on to make an assertion that is attractive to me and I wonder how valid it is. He seems to be saying that the belief mechanism that seems to underlie the instinct for blame is based upon a static or "snapshot" perspective that dominated historical belief systems and continues today. That seems to align with a view that belief systems tend to change very slowly, if at all. The concluding sentence to chapter 2 seems to me to be very true in general and would challenge educators to consider our own process of perspective and belief formation and consider how this might inform our instruction.

Chapter 6 is, important, for the reinforcement of Easterly's aid thesis - that is that foreign aid provides long term (or even short term) benefit to developing countries. Thinking back to the end of chapter 2, I wonder how effective the analysis in this chapter would be to an audience that is primarily operating with a "snapshot" perspective that generates a belief in the efficacy of policies such as aid.

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