In the 1980s, the advent of some
newly-industrializing countries (NICs) in east Asia, such as Taiwan and South
Korea, was generating excitement around the world that the gap between the least
developed countries (LDCs) and the developed countries (DCs) then had a viable
bridge through foreign direct-investment; that is, what had been a dichotomy
was becoming a spectrum. The hope that globally-circulating capital might raise
even the LDCs out of poverty. Of course, there was scarce any thought that the
combined pollution of an economically developing world would raise
global air and sea temperatures above 1.5C. Human beings are too near-sighted
for that, and, of course, there is the allure of profits and higher salaries
and wages. Also, the sheer inexorability, or stubborn persistence, of poverty in
scaring off rather than being lifted up from foreign-direct investment may have
been minimized by the hope. Roughly forty years later, Oriana Bandiera of the
London School of Economics spoke on the theory that economic opportunities are impacted
by how much wealth a person has at the outset—the alternative theory being that
the opportunities are just as good for the poor as for the rich because differences
are due to exogenous (i.e., outside) factors. The micro-level condition of a
country’s poor impacts the attractiveness of a country to foreign
direct-investment.
Thursday, February 27, 2025
Poverty Impeding Development
