A quantitative look at development problems

Abstract

For the first time in the history of humanity, there is hunger and poverty in the world, not because of a lack of resources, but because of the way in which wealth is distributed among countries and among people. The need to understand the mechanisms for mitigating inequality is a moral imperative for academia and for those responsible for economic policy. Volume 9 in its number 2, we examine that the level of employment is one of the factors that most explain the dynamics of income inequality. Although it seems paradoxical, the countries got used to it and stayed in the rising phase of the Kuznets income-equity curve, where increases in production do not necessarily reduce inequality, but rather increase it. The institutional and economic mechanisms that promote a more equitable distribution of income demand a thorough and detailed review of today's society. For example, foreign direct investment flows should implicitly include the social and environmental responsibility agreements of transnational corporations. Developing countries cannot become a space for the extraction of wealth that flows to developed countries. Technology transfer, the formation of local human capital, productive chains, the local productive fabric, the payment of taxes, are some of the mechanisms that can be applied to achieve an inclusive society. The role of public spending is relevant as an instrument of equity and social cohesion. Public spending can and should be a mechanism to improve income distribution. Recent literature suggests that public spending has a significant impact on growth and the new approach is to promote green economic growth with equity.
Capital flows must benefit all parties, and not just speculative investors who harm the environment and destroy and do not generate local productive capacity. The outflow of foreign currency due to imports is another problem that today's society must solve. The advantages of international trade must be translated into well-being for the inhabitants of developing countries. If the industry is not oriented to substitute imported products effectively, the negative balance of the balance of payments can be a time bomb with notorious effects in the long term. In fact, a structural change that a dollarized economy requires is that interest rates cannot be excessive and even detrimental to existing microentrepreneurs or new entrepreneurs. The nature of the interest rate is to balance the supply and demand market for money and not offer a distorted return to speculators. Finally, the volume deals with how the debt can be used to accelerate development, in particular the debt must be oriented exclusively in profitable investment projects and not in current spending. Reading the entire volume offers a quantitative look at development problems.