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Evidence on Poverty Traps from Rural Bangladesh [pdf]

lse.ac.uk

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Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#41
post #37
post #25

Earlier quoted context omitted.

Why wouldn't it? In the end this is a people problem, not a tech problem. And both Silicon Valley and Bangladesh have some form of "local" meritocracy. Meritocracy applied and working within your stratum but not across the boundaries. Whether you're poor or in a lower caste you still get some form of meritocracy within your group to keep you content and motivated. But crossing the boundary to the next level, while no…

You don't think things like access to education, medical care, clean water, nutritious food, vaccinations, quality public schools, subsidized colleges, rule of law, minimal corruption, limited impact of religious identify, avaiable reliable housing might have an impact on the outcomes?

That's... absolutely not what I said, or implied. Access to all of that is the boundary between the layers. People in layer n will make sure people in layer n-1 are missing at least one thing so they can't compete on equal footing. People in layer n+1 will do the same to people in layer n.

If you don't have access to schooling and someone else does then that's something that will make you always start with a handicap when competing with them. The boundary, whether education or medical services, is there so one layer feels safe from the inferior one. People want it there even if this means they start off with a handicap compared to the superior layer. Most people are more afraid of losing what they have than they are keen on winning something they don't already have.

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#42

For those who want a TL;DR, below is an extract of the summary. I think they did a good job, the article was well written. Poverty traps are one of the most fundamental concepts in development economics. The contri- bution of this paper has been to provide evidence for their existence using the combination of a randomized asset transfer and an 11 year follow up in rural Bangladesh. Our key finding is that people stay…

Was searching for this. Thank you for writing.

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#43
> We find that in the absence of credit constraints only 2% of households would be best off doing wage labor, while 97% of households are exclusively reliant such work at baseline. Conversely, only 1% work in livestock when 90% would do so if they had access to the same asset wealth as the middle and upper classes. Overall, this implies that 96% of households are forced to misallocate their labor.

So the authors suggest that currently 1% of the labor pool is working in livestock, but an optimal allocation would be 90% of the labor pool? Ridiculous.

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#44
post #36
post #9

Earlier quoted context omitted.

Unequal distribution of rewards (i.e. according to merit) is fine and desirable (as a motivating force). The problem's roots are when the distribution of rewards becomes hereditary , that the children of the wealthy have near-guaranteed access to the best educational and social institutions, have near-guaranteed access to startup capital (i.e. from their parents), are usually provided with necessities (food, housing,…

Distributing rewards according to merit may be beneficial, but the problems with unequal distribution go far beyond hereditary rewards. Consider the income distribution according to jobs. Some jobs are assigned greater monetary rewards than others even if they are essential to the functioning of society. Much of that comes from our notions of status. I would argue that distributing wealth according to merit only work…

Are you sure? I believe that rather than notions of status the main factor that determines salaries is supply and demand of workers.

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#45
post #2

These conclusions seem to spit in the face of "meritocracy". It's always puzzled me that this idea of meritocracy, especially in tech (notably USA), is so pervasive, bleeding into our corporate performance reviews and our pro-diversity efforts ("we hire only according to merit" ). But it is so internally irrational. I'm reminded of this argument: > The case against meritocracy can be put psychologically: (a) The abol…

“ Above all we need to focus on delivering opportunity via improved circumstances and empowerment, irrespective of merit or success: that is the only path to actual equality.” Please consider that you are advocating for communism. I hope you will consider reviewing the histories of China and the USSR, et al. after World War 2. The critique and solution you offer do not lead to “actual equality.”

[deleted]

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#46
post #2

These conclusions seem to spit in the face of "meritocracy". It's always puzzled me that this idea of meritocracy, especially in tech (notably USA), is so pervasive, bleeding into our corporate performance reviews and our pro-diversity efforts ("we hire only according to merit" ). But it is so internally irrational. I'm reminded of this argument: > The case against meritocracy can be put psychologically: (a) The abol…

Anecdata that agrees with you follows. Meritocracy is still a factor but the bar is currently very low. My own father came out of the impoverishment of war torn Bangladesh to be a successful real estate developer in the west. Why did his elder brother not have the same results? Very simple: the elder brother was responsible for the family. The family has rewarded the elder brother by taking care of him for years now…

My wife did her bachelor thesis on Grameen bank, Muhammad Yunus and microfinancing. That was like 2009.

Is microfinancing still a thing in Bangladesh? What are the effects since then?

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#47

For those who want a TL;DR, below is an extract of the summary. I think they did a good job, the article was well written. Poverty traps are one of the most fundamental concepts in development economics. The contri- bution of this paper has been to provide evidence for their existence using the combination of a randomized asset transfer and an 11 year follow up in rural Bangladesh. Our key finding is that people stay…

How much of this is due to over-population? If the population of Bangladesh was 80 million instead of 160 million - giving each person access to theoretically double the amount of resources and land - would the net improvement be greater than 2x? What about 40 million - would the improvement be 4x? The solution may ultimately be a one-child policy, as demonstrated successfully by China.

> The solution may ultimately be a one-child policy, as demonstrated successfully by China.

It turns out that most Chinese couples were allowed 2 children:

https://en.wikipedia.org/wiki/One-child_policy

But there's wide reporting of females being scarce, so some families were involved in female infanticide, which will cause long-term demographic issues.

China is currently facing famine, so we'll see how that affects the population. (It turns out that although China is a communist country, they didn't/don't provide welfare for the flood victims, tens of millions of whom are farmers.)

A more regional problem is that China is damming the Himalayan head waters, so the downstream countries (India, Pakistan, etc.) will face drought on a large scale. Usually that leads to war.

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#48

Earlier quoted context omitted.

If only there was some person or some group to realign society and correctly place everyone according to ability.

For those that are inevitably about to argue and downvote the above... It seems the economy is returning, smartly, towards keynesian models because we've seen first hand how destructive the past 50 years of austerity and free market economics has become. Its clear to me that we need to have a strong government to save the economy from market failures, including but not limited to job guarantees echoing those of the n…

I agree that there were great policies established under the new deal. I would caution advocating for blanket rescuing of the economy from market failures, though. The recent stimulus provided by the US congress to the airline industry is a perfect example of executives taking advantage of taxpayers. I would also push back against the idea that the last 50 years have been destructive economically.

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#49

Earlier quoted context omitted.

For those that are inevitably about to argue and downvote the above... It seems the economy is returning, smartly, towards keynesian models because we've seen first hand how destructive the past 50 years of austerity and free market economics has become. Its clear to me that we need to have a strong government to save the economy from market failures, including but not limited to job guarantees echoing those of the n…

I agree that there were great policies established under the new deal. I would caution advocating for blanket rescuing of the economy from market failures, though. The recent stimulus provided by the US congress to the airline industry is a perfect example of executives taking advantage of taxpayers. I would also push back against the idea that the last 50 years have been destructive economically.

An example of a market failure is climate change, or at least many market failures are contained within this problem. Are you suggesting the government take a hands off approach to that? At the end of the day the government is necessary to the functioning of capitalism, we need to help people out of poverty so that among other things the economy can actually improve. That's all I'm arguing for, and I think there is undeniable proof of it at this point.

Re: Evidence on Poverty Traps from Rural Bangladesh [pdf]

#50
post #2

These conclusions seem to spit in the face of "meritocracy". It's always puzzled me that this idea of meritocracy, especially in tech (notably USA), is so pervasive, bleeding into our corporate performance reviews and our pro-diversity efforts ("we hire only according to merit" ). But it is so internally irrational. I'm reminded of this argument: > The case against meritocracy can be put psychologically: (a) The abol…

"It's always puzzled me that this idea of meritocracy,"

Nothing puzzling about it. It's a "just so" story designed to make successful people feel good and justified about their success.

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