Institutions, Economic Theory and Econometrics . Smith joined the faculty of The George Washington University in He is the author of Ending Global Poverty: Smith is the author of other publications including approximately three dozen journal articles.
Developing world[ edit ] This article may be unbalanced towards certain viewpoints. Please improve the article by adding information on neglected viewpoints, or discuss the issue on the talk page. June In the developing worldmany factors can contribute to a poverty trap, including: He recommends that aid agencies behave as venture capitalists funding start-up companies.
Venture capitalists, once they choose to invest in a venture, do not give only half or a third of the amount they feel the venture needs in order to become profitable; if they did, their money would be wasted. If all goes as planned, the venture will eventually become profitable and the venture capitalist will experience an adequate rate of return on investment.
Likewise, Sachs proposes, developed countries cannot give only a fraction of what is needed in aid and expect to reverse the poverty trap in Africa. Just like any other start-up, developing nations absolutely must receive the amount of aid necessary and promised at the G-8 Summit in  for them to begin to reverse the poverty trap.
The problem is that unlike start-ups, which simply go bankrupt if they fail to receive funding, in Africa people continue to die at a high rate due in large part to lack of sufficient aid.
Sachs points out that the extreme poor lack six major kinds of capital: The poor start with a very low level of capital per person, and then find themselves trapped in poverty because the ratio of capital per person actually falls from generation to generation.
The amount of capital per person declines when the population is growing faster than capital is being accumulated The question for growth in per capita income is whether the net capital accumulation is large enough to keep up with population growth. Sachs argues that sufficient foreign aid can make up for the lack of capital in poor countries, maintaining that, "If the foreign assistance is substantial enough, and lasts long enough, the capital stock rises sufficiently to lift households above subsistence.
In this sense, Sachs views public institutions as useful in providing the public goods necessary to begin the Rostovian take-off modelbut maintains that private goods are more efficiently produced and distributed by private enterprise.
Another theory for the perpetual poverty trap in correlation with cycle of poverty is that poor people have their own culture with a different set of values and beliefs that keep them trapped within that cycle generation to generation.A federal agency, created to fight poverty, spent $, on a name, logo and branding From skeptics of Frank Lloyd Wright to believers Subscriber content Explainer The end of GM’s Oshawa plant.
Stephen C. Smith was a nonresident senior fellow in the Global Economy and Development program. He focused on poverty, economic development, economic organization, and climate change adaptation.
Author Information. Department of Resource Management and Geography, University of Melbourne, Victoria , Australia.
Email: G. H. van der Horst (leslutinsduphoenix.comhorst. Buy Stephen Smith books in India. Collection of books by Stephen Smith: Test - Driven Infrastructure with Chef (English) 2nd Edition (Paperback),Departure,One-sided Triangle,Parentcraft,Penalty,The City That Was,Ending Global Poverty: A Guide to What Works,The Causes Of Infidelity Removed,American Medical Times - Vol.
FOREIGN AID TO AFRICA: A HOLLOW HOPE?* KWAME AKONOR* Sachs’s book The End of Poverty and the United Nations (UN) Millennium Development Goals (MDGs) have given this made by Professor Stephen Smith of George Washington University.
Ste-phen Smith. September 28, CURRICULUM VITA. Stephen C. Smith. Professor of Economics and International Affairs, George Washington University Department of .