Article Reviews

Analysis of Donaldson’s growth is good Essay

Posted on

An Analysis of John Donaldson’s Growth is Good for Whom, When, How?  Economic Growth and Poverty Reduction in Exceptional Cases

Abstract

In certain cases wherein policies that were set on economic growth and liberal economic policies do not help the poor, the problem resides on the ineffective manifestation of laws, which is being reflected on two types of cases: the negative and the positive exceptions.  If this problem remains unresolved, the consequence would be reflected on the slow improvement of the economy, as well as, the financial setback that would occur because certain laws have not been able to fulfill its major objective in terms of improving the economy through poverty reduction.  Therefore, Donaldson declares that the solution resides on the implementation of alternative pathways to economic growth and neoliberalization.  Poverty reduction policies should never come at the expense of economic growth.

An Analysis of John Donaldson’s Growth is Good for Whom, When, How?  Economic Growth and Poverty Reduction in Exceptional Cases

Summary

            In the article of John Donaldson entitled “Growth is Good for Whom, When, How?  Economic Growth and Poverty Reduction in Exceptional Cases,” the nature of the problem centers on certain cases wherein policies that were set on economic growth and liberal economic policies do not help the poor.  The problem resides on the ineffective manifestation of laws, which is being reflected in two types of cases: first, the negative exceptions (i.e., cases wherein income growth is lower than the expectation); and second, the positive exceptions (i.e., cases wherein income growth exceed the expectation).  Solving these two cases is very important when it comes to poverty reduction.

            Empirical evidence was taken from Dollar and Kraay’s (2002) calculation dataset of some 137 countries in the years 1950 until 1999.  From here, the annual growth of GDP was taken, as well as predicted annual change in income of lowest quintile, the reported annual change in income of lowest quintile, the residual, and the “outliner”.  This led to another data that clustered the positive exception cases from the negative exception cases (table 2).

            The cause of the problem resides in the futility and inaccuracy of certain policies centered on macroeconomic stability and poverty reduction.  There are exception cases wherein policies do not solve problems, especially because economic growth and poverty reduction follow a one-to-one basis (Donaldson, 2008, p.2127).  The problem centers on the ineffective relationship between economic growth and poverty reduction, worsened by the fact that poverty reduction remain to be misunderstood and miscalculated.  If this problem remains unresolved, the consequence would be reflected on the slow improvement of the economy, as well as, the financial setback that would occur because certain laws have not been able to fulfill its major objective in terms of improving the economy through poverty reduction.  What remains to be affected if this problem remains unresolved would have something to do with “reducing inflation, moderation the size of the government, respecting the rule of law, opening the economy to trade, and establishing a sound financial system” (Donaldson, 2008, p.2127).  Therefore, Donaldson declares that the solution resides on being able to implement some alternative pathways to economic growth and neoliberalization, such as being able to disaggregate the aggregate statistical models, which are being reflected in the law.  Poverty reduction policies should also not come at the expense of economic growth.

Analysis

            This issue on the exceptional cases in certain areas of the public is connected to the debates or course material in the sense that, the principles of economic development contain the truth that improving the economy results in being able to maximize financial growth by solving the overall case as well as the one-to-one, exceptional cases that are being reflected in the society.  Economic development should include laws and policies that include each set of situation in the society.  The manifestation of laws and policies should lead to effects that are positive to economic growth concerning each type of situation, since the reduction of poverty would turn out to be futile if the laws solve only a section of those that live in poverty.

            The author’s thesis or argument states that, in certain cases wherein policies set on economic growth and liberal economic policies both appear to be futile, the solution rests on being able to disaggregate the aggregate statistical models that are being reflected in the law.  The negative and positive exceptions both reflect unsustainable economic growth because the income growth appear to be either too less or too much.  Therefore, to solve poverty reduction, the solution rests on improving and reorganizing the laws and policies.

            Conversely, John Donaldson (2008) formed his assumptions that are the following: First, the factors identified demand further attention (p.2138), since being able to cluster and label these cases would be insufficient and ineffective.  Second, the issue and relationship between the short-term and long-term natures of the exceptional cases demands further address (p.2139), since they can either benefit or plunge the poor people of the society.  Third and final, Donaldson (2008) also included that some exceptional cases results from the fact that some “poverty reduction policies came at the expense of economic growth” (p.2139).  Thus, it appears that, being able to review thoroughly the nature and effect of laws or policies related to economic growth and poverty reduction leads to further growth and expansion.

            In writing his piece, Donaldson (2008) has used key concepts, such as economic growth, poverty reduction, and liberalization.  The strength of the article, however, can be found on being able to clearly identify the basic summary and thesis right at the start of the article.  Aside from the additional quotations that were added in the first page, it also reveals clear identification of the basic parts of the article.  The use of strong and effective samples and evidences, such as the data included in Dollar and Kraay’s (2002) article, led to strong results or conclusion as well.  Donaldson’s (2008) article also revealed great knowledge on the topic, as it revealed clear and identifiable data that almost anyone would have understood.

            When it comes to the weaknesses of the article, however, it appears that the thesis or argument is simple enough the reader would have known it even before reading Donaldson’s (2008) article.  Except for the data that was used as empirical evidence, the overall design used in writing the article appears to be quite ordinary there is almost nothing that would have made a big impact on the reader.  It would have been better if the writer linked the issue on realistic, day-to-day sample events that reflect, not just the numbers or the cases of other countries, but also the way the numbers generally affect the society and the economy.

From the summary and the analysis that were generated above, though, I do agree with the statement of Donaldson (2008) that the solution of the exceptional cases rests on being able to disaggregate the aggregate statistical models that are being reflected in the law.  Economic growth and poverty reduction both depend on proper implementation of laws.

Reference

Donaldson, J. Growth is good for whom, when, how? Economic growth and poverty reduction in exceptional cases. World Development, 36, 11, 2127-43.