Free Custom «The Elusive Quest for Growth» Essay Paper

1) Pros and Cons of Helping the Poor by Increasing Overall Economic Growth Versus Redistributing Income?

Economic growth is highly desirable and should be a priority with an elaborated development plan of any government at any circumstances. First of all, economic growth enhances living standards, thereby helping poor people to find more opportunities to be engaged in work, produce goods and services and boost overall GDP growth. It leads to improvement of personal health, education and makes life expectancy level higher. “From the mid-18^thcentury to today, life spans in the advanced countries jumped from less than 30 years to about 75 years. Average life expectancy in the U.S. has grown by more than 50% since 1900. Infant mortality declined from 1 in 10 back then to 1 in 150 today. Children under 15 are at least 10 times less likely to die, as one in four did during the 19th century, with their death rate reduced by 95%” (Ferrara). Therefore, economic growth is overall a boon for society.

 

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Understandably that economic growth has its negative repercussions for poor people, if it benefits only those who control power and business in particular country. It leads to further distortion of equality; deepens stratification and make life of poor even worse, while creating profits for rich who are able, due to their influence, lobby and enforce legal acts in their favor. These situations could be observed in China, India or post-Soviet states. When it comes to redistribution, we may agree that it might lead to the “slash of economic growth, and even reverse it, as we have seen in extreme socialist and communist countries around the world” (Ferrara). Therefore, it is obvious that forceful redistribution of income is not a solution; it deprives entrepreneurial minded people of incentives, which in turn, resulted in economic downturn or standoff.

Shadow economy and offshore holes have to be excluded in order to control more or less equal redistribution of income among citizens. So economic growth together with elimination of loopholes for big businesses is the right way to alleviate poverty and help them to find themselves in the world.

2) “Aid for Reform” Approach,Countries Pretending to Reform the Reasons Donors Are Willing to Repeatedly Lend to These Countries?

Taking a brief look at reforms that were conducted in several African countries, we can mark that it varied from state to state, depending on ability of particular government, its political will. Only two countries in Africa (Ghana and Uganda) can boast as “successful reformers that grew rapidly and reduced poverty” (Devarajan, Dollar, Holmgren). Other showed insignificant results or failed to improve at all. Usually governments of developing countries ask international financial establishments for aid to develop or support certain industries, create jobs, build infrastructure and to cope with negative impact of crisis or recession. Quite often they receive such financial aid with stipulation that interest will be paid at certain date and lay down provisions if recipients fail to pay in time. The problem for societies of developing counties is that donors do not pay much attention how these means are spent and on which projects (Easterly). Therefore, government of recipient state decides on its own where money is directed. Not rarely these means are squandered or go offshore into the pockets of corrupted officials leading country into debt. Understandably, interest rate is not paid in time and debt is being accumulated compelling the state to sell national assets to foreign lenders which exacerbates the economic situation. As a result, developed countries get richer, developing are gradually losing their sovereignty.

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3) Reasonable goal (or Set of Goals) in Economic Development?

Economic growth, efficient and stable economy with low inflation and unemployment rate are goals which must be pursuit by any government. Prudent economic policy leads country to prosperity and well-being of its citizens. It does open the door to personal development and “new hope” (Burgess). These goals “invoke themes with deep roots in American culture: faith in the future, the desire for freedom, and the demand for choice” (Burgess). It reasonable to understand that economic growth should be accompanied with fair distribution of income between those who engaged in work process. Poverty alleviation and introduction of improved living standards is achieved due to modern technologies and new approaches to the current problems. It means that science and economic development should be inseparable with each other, creating mutual reinforcing mechanism that would bring constant economic growth and improvement of people’s life.

4) Policies for Reasonable Goals in Economic Development

In my opinion, the most successful the policy which combines free trade market economy with elements of protectionism in order to give possibility for country to breed those industries where it has comparative advantage. Government intervention is desirable and needed when it comes to building strong economy and independent from external shocks. It has to be mentioned that these objectives can be achieved only in that way if government, civic society and non-governmental organizations focused on common goal, that is, economic prosperity of the state. It means that any other interests, perhaps selfish they may be due to human nature, should be overcome in order to build strong state with viable institutions and high level of personal responsibility of those who rule the state. It is possible to achieve when all three branches of power are in the position of constant checks and balances so as to avert potential risks of abuse of power. The history of the US and Britain gives us a bright example of how countries achieved the progress by following these principles and employing the elements of moderate regulation.

5) Christianity’s Role (e.g. Principles, Organizations) in International Economic Development?

Christianity has always moved with Western Civilization and its principles deeply incorporated into liberal thinking. Prudence in economic affairs, poverty alleviation, and private property protection are postulates that originated from Christianity were taken by liberals and fixated in today’s modern economic relations. “The Christian worldview embraces a form of democratic capitalism that allows for the peaceful and free exchange of goods and services without fraud, theft, or breach of contract as the biblical view” (Noebel). International economic development, in my opinion, should be based on these principles as they are universally acceptable which will serve for the better for everyone in society.