Economists and the World Bank
Try to understand how oral health is applicable in these situations:
Rick Politician
87345
4/2/2007
B BUS 550
Assignment #1 – World Bank
1. Both ecologists and their counterparts, economists, have many arguments that support how they believe the World Bank should decide on which future projects to invest in. Essentially, ecologists believe that the traditional economist ideal of choosing projects on how much the project will increase a country’s GNP and encourage free trade does not take into consideration important issues. Two of these issues are equal distribution of the wealth from a new project to the poor and that some costs the project may cause like depletion of natural resources and the destruction of the local environment. On the other side of the issue, economists believe that by increasing the GNP and enabling free trade, the whole of society will reap the benefits and any environmental consequences will eventually be solved through the application of technology.
Eventually the World Bank came to the conclusion that ecologists and economists were actually fighting for the same thing, a higher quality of life for the world’s present and future populations. They saw that a healthy environment was an essential part of sustained development and that, likewise, development could support the advent of environmental responsibility in developing nations. Nevertheless, there are many strengths and weaknesses to both the ecologists and the economist arguments. This balance of arguments led to the World Bank’s decision to compromise between the two opposing viewpoints.
One argument presented by the ecologists stated that the loans given to developing nations often reinforced the oppressive position of the rich and did little for the poor. Although the rich certainly received benefits from the loans, Exhibit 6 in the World Bank article shows that Agriculture and Rural Development ranked as the number one sector loans were dedicated to within the developing countries. The poorest citizens in developing countries are usually the rural inhabitants and the owners of small farms. The farther away from the cities the fewer infrastructures exists for the inhabiting population. In this exhibit, the World Banks efforts are shown to be targeted towards helping the poorest citizens.
Furthermore, the percent of global citizens living under the level of poverty has consistently fallen for the last couple decades and is expected to continue to fall. In Exhibit 1 the aggregate poverty level as a percent of population for 1985, 1990 and 2000 has fallen (or, is predicted to fall from 1990 to 2000) from 30.4% to 29.4% and to 24.2% respectively. This evidence shows that even the rich may be receiving a portion of the benefits from World Bank loans, there is most likely more than a “little tRickling down to the poor” as the ecologists have stated.
The ecologists also wrote of the poor being confronted with disease, famine and death as well as receiving a large chunk of the burden of debt from the World Bank loans. The validity of these claims cannot be strongly supported or discredited due to the lack of factual information in the article. Although, it is interesting to note that the Brazil had received the most loan money from the World Bank(over $100 Billion by 1993), yet their Gini index of around 65-70 was the highest in the world in 2000 for semi-developed nations. This means they have worse distribution of wealth over their entire population.
In contrast to ecologist stand the entrenched and established economists. The economists argue that the idea that higher development equals higher environmental degradation is false. They believe that this ecologist ideal looks strictly at past projects where environment concerns were not considered during planning process and current and up and coming technologies could not be applied.
This view of the economists is covered in a layer of optimism. They are optimistic in thinking that technology advances will keep up with development and enable producers to continue to produce more with the same or less environmental impact. They are optimistic that individuals operating in a free trade society will begin to take accountability for their own pollution. They are optimistic that developing societies will not one day make the big, irreversible mistake that lowers the quality of life on earth forever. These things and many others have to go the right way for the World Bank, or this economist belief could lead us to a very over polluted and resource depleted planet.
On the other hand, it seems that human progress, expression and development cannot be stopped. The human race continues to advance in areas of science and production. The economists may be right. The best choice for the World Bank may be to attach a larger weight to environmental concerns when deciding whether to loan money to projects and attempt to use technology to combat accepted negative environmental consequences.
3. Lawrence Summers believes that the traditional economist logic supports pollution of developing nations, even though he does not appear to personally or professionally support the practice. He finds it difficult as Chief economist for the World Bank to balance moral, social and environmental concerns with traditional economic logic.
Summers’ “narrow-minded” economist view that pollution should be dumped in developing neither agrees with the thoughts of ecologists or economists in the World Bank article. Ecologists neither support creating the pollution or dumping it in another country and economist do not seem to encourage the dumping. Both sides are pushing for accountability of environmental impact and responsible environmental practices.
The only people who support dumping pollution are the governments and the private enterprises. The World Bank article explains that the U.S. and Europe are dumping “200 tons of toxic waste” in Argentina every day.