Wednesday, July 12, 2006

South Africa and fighting poverty

Our Political Economy class is currently reading a journal article, "Neoclassical and structural analysis of poverty: winning the 'economic kingdom' for the poor in southern Africa." by Sarah Bracking at the University of Manchester. She combines many references which I was reading the last quarter, Ravillion, Dollar & Kraay, and Rodrik on trying to understand whether inequality have effects on growth. She also brings up the points on how econometrics have weakly proven its case in connecting openness in trade and strict macroeconomic policies with efficiency and growth in developing countries.

"To my mind, capitalism went wrong when it divorced wealth from its true purpose. The true purpose of wealth is to satisfy very simple needs: the need for food, the need for shelter, the need for education, and so on. In other words, the end of wealth is the banishment of poverty - and wealth is to poverty what light is to darkness." (Julius Nyerere in 1965, cited in Charlick, 2003)

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