development

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Are things getting better?

How do twenty-first century problems stack up when viewed through a historical lens? Nick Henderson considers whether 200 years of context can change our perceptions.

Nepal and the trouble with aid

In the wake of the recent earthquake, Nepal received a deluge of international aid. But does aid help developing economies or stifle them? Jesse Condie examines the evidence.

Voluntourism and the obvious pitfalls of ‘orphan demand’

When eco-tourism first emerged as a buzzword in the 90s, this was universally accepted to be a good thing. Demand by affluent travellers for authentic first-hand experience of pristine jungles, mountains and beaches caused local communities to see their natural resources as a source of tourist income. They were incentivised to work harder to protect those resources. A range of new jobs that depended on conservation efforts were created.

At the outset of the millennium we are now seeing the rise of ‘voluntourism.’ Not dissimilar from eco-tourism in some ways, this is driven by demand by affluent travellers from the developed world looking for first-hand experience volunteering to alleviate poverty. The experience typically lasts between one day and four weeks, with tourists carrying out low-skilled work such as caregiving in orphanages or constructing temporary housing for displaced persons. As a result, providing experiences assisting highly visible people in need becomes a source of income.

It does not take an economist to recognise that market demand for ‘helping experiences’ creates perverse incentives. The most troubling of these is the phenomenon of ‘orphan demand.’

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A Game of ‘Productivity’

G.R.R. Martin’s fictional universe in A Game of Thrones evokes a number of economic phenomena found in many modern day economies. Specifically, the Seven Kingdoms (regions south of ‘The Wall’) is characterised by a dual economy, significant urban-rural wage differentials, widespread poverty and unemployment, underdeveloped infrastructure, low national savings, high debt, civil war and fiscal irresponsibility.

Collectively, these characteristics mirror many of the factors that constrain economic growth and productivity in contemporary developing economies.

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To be economically free, or not to be? That is the question.

Based in Canada, the Fraser Institute is often referred to as a “think tank”, and follows the motto “if it matters, measure it”. Initial efforts towards the Economic Freedom of the World (EFW) project began in 1989, with a meeting between Milton and Rose Friedman, and Michael Walker (founder of The Fraser Institute). The project is aimed at “clearly defining and measuring the consistency of institutions and policies with economic freedom for a large set of countries and territories”.

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