Hi Toby,
Thanks for flagging this, and apologies for the delayed reply (I’ve been on holiday since posting, and wanted to compose a full reply).
I’ve double-checked the paper and I believe I am reporting it accurately. I trust this journal, but I’m not a specialist in economics. I’d encourage you to check out their paper and methodology, for more details.
Here’s part of their abstract for clarification:
“Our results show that in 2015 the North net appropriated from the South 12 billion tons of embodied raw material equivalents, 822 million hectares of embodied land, 21 exajoules of embodied energy, and 188 million person-years of embodied labour, worth $10.8 trillion in Northern prices – enough to end extreme poverty 70 times over. Over the whole period, drain from the South totalled $242 trillion (constant 2010 USD). This drain represents a significant windfall for the global North, equivalent to a quarter of Northern GDP. For comparison, we also report drain in global average prices. Using this method, we find that the South’s losses due to unequal exchange outstrip their total aid receipts over the period by a factor of 30.”
Here’s the relevant explanation section on extreme poverty:
“This drain represents a significant loss for the South. For perspective, $10.8 trillion would have been enough to end extreme poverty 70 times over in 2015; i.e., with reference to the poverty gap at $1.90 per day in 2011 PPP, which is expressed in roughly the equivalent of Northern prices (World Bank 2021). It is worth noting that this result is larger than previous estimates of drain through unequal exchange (e.g., five times larger than in Hickel et al., 2021). This is because the footprint data we use here captures not only traded goods but also the upstream resources and labour embodied in the production of traded goods, which results in a larger North-South price differential (d).”
Here’s the section on aid:
“Our results show that net appropriation by DAC countries through unequal exchange from 1990 to 2015 outstripped their aid disbursements over the same period by a factor of almost 80 (Table 5, fourth column). In other words, for every dollar of aid that donors give, they appropriate resources worth 80 dollars through unequal exchange. From the perspective of aid recipients, for every dollar they receive in aid they lose resources worth 30 dollars through drain....the empirical evidence on unequal exchange demonstrates that poor countries are poor in large part because they are exploited within the global economy and are therefore in need of justice.”
Hi Jitse,
Thanks for the positive feedback!!
I couldn’t agree more with your sentence: “making sure that effectiveness is ranked according to the worldview and needs of the people effected (instead of the people trying to ‘help’ them) is of utmost important to be truly effective”.
I agree that for EA to claim to be truly effective, the EA community must thoughtfully consider feminist, decolonial and Indigenous critiques—though I fear that the epistemic architecture of EA (for reasons I try to unpick in my piece) may make it impossible for these to be voiced, heard and acted upon within EA.