First, he explains that the so-called “poverty trap” is not the cause of poor nations’ slow or nonexistent growth, despite the claims of foreign aid organizations. Easterly argues instead that bad governments and their interference with their economies may be the reason for many countries’ slow growth. To fix this problem, many aid organizations attempt to assist poor nations by restructuring their economic institutions from the top down. However, Easterly claims that these attempts have shown to be futile time and time again. He argues that this is because restructuring an entire economy from the top down is almost always bound to fail.
Foreign aid has forced many governments to shift some of their responsibility from guaranteeing their citizens rights to pleasing donors so as to maintain good ties. It makes governments less accountable to their citizens and has led to civil wars, rampant corruption (electoral and otherwise) and has been central to an undercurrent of irresponsibility culminating in increased and self-reinforcing poverty since independence from colonialism. (Mukanga, 2009). Systems are put in place that promotes poverty which is then used to justify foreign aid. During an interview for his documentary Poverty Inc, Michael Matheson Miller said, “They are not poor primarily because they lack stuff; they are poor because they are excluded by the institutions of justice.
(Kathleen Thompson and Charlotte Medina 2012). In others word, bribery is a shortcut ways to achieve success in a business. Bribery can be seen to encourage some level of effectiveness and help reduce the rate of bureaucratic bottlenecks especially among government officials whereby paperwork is rushed as a result of a bribe being paid or delayed as a result of a bribe not being paid. Bribe income also helps to attract qualified applicants to low paying jobs like position of police, customs, tax office and immigration. To a certain situation this will help reduce the unemployment rate in some countries.
As I illustrated up in my paper since 90’s the economic development of developing countries in East Asia were demonstrated although the economic growth was happening, but it plays mainly in the social development. The quick movement in the economic growth makes inefficient effects on environment and resources, however, the economic growth is not based only on good environmental system, ineffective investment, different marketing misrepresentations and prevailing corruption will come to the poverty population as it will be depressed of the ability and chance to participate marketing activities and political decision-making. So we have to carefully survey the complex relationship between the economic growth and poverty
This trend could continue resulting in the rich become richer and vice versa. According to urban sociologist Saskia Sassen (1998), a portion of world population may enjoy its prosperity while others may still be severely affected by poverty, an unfortunate result of inequality. However, the globalization is not the only factor that causes inequality between the rich and the poor in one nation. Other factors that translate into inequality can be ineffective management of the government or corruption. Ackerman (1999) also claimed that corruption increases poverty because the poor cannot get access to real available social services.
Although the government claims that the GST would not hurt business but in fact it will hurt the businesses too. The low demand in the market may cause decrease of supply the product. When the shortage of supply the businesses have to cut down the expenses such as labor cost due to the lower output needed and it will increases the rate of
High corruption also results in poor quality of resources which reduces the productivity. Thus corruption will have its negative effect on both quantity and quality of public investment. So, corruption reduces the efficiency of public money by allocating the budget to unneeded projects. Also it reduces the revenues because corruption can lead to tax evasions or lower tax collections. The more the corruption, the slower is the economic
From the above literature review, one can conclude that the main problems of democracy are fairness and transparency, the influence of big money and that the individual desires for profit manipulate the democratic process and the public sector. As a result, it is obvious the imperfection of the current pollical systems, and as an extension the representative democracies. Is common to see that the representatives act for their self-interests or for a group of minorities that supports them, and have been accused of corruption. This means that not all voices are being heard and there is no equal distribution of power. People are not motivated to participate in such unfair political system and wish for a more direct fair democracy.
This statistic tells us that the income gap between high income earners and low income earners have decreased, which is a positive thing. The drop in the Gini coefficient is probably thanks to the government as they have implemented various policies and schemes to tackle this problem of inequality. Budget 2013, tighten foreign worker
QUESTION1 EXPORT SUBSIDIES Export subsidy reduce the price paid by foreign importers, which means domestic consumers pay more than foreign consumers. Export subsidies are government policies to encourage the outflow of goods and services from a domestic economy to the international market and discourage the sale of goods and services on the domestic market through direct payments, tax relief for exporters. Advantages of export subsidies infant industries Export subsidies protect small or developing countries so that they can benefit from economies of scale, as a result the production cost of infant industries will be low. National security Domestic production of goods that are found to be harmful to the security of the nation are encouraged