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March 28, 2005
How should we go about ending poverty? (Sachs vs. Easterly)
Yesterday's Washington Post included a letter from Jeffrey Sachs responding to William Easterly's review of his book The End of Poverty. Tyler Cowen of Marginal Revolution was somewhat critical of Sachs' recommendations in the first place. Co-blogger Alex Tabarrok is unhappy with Sachs' response to the review.
My 2 cents: I saw Sachs on C-Span2 this weekend. (For those who don't know, C-Span2 has what they call "Book TV" on the weekends and it's a great thing to have on in the background when you are blogging or, as I was doing, fixing your father-in-law's computer.) Sachs was speaking at an event sponsored by the World Bank. It was quite a compelling speech. He is a first-rate economist and I have enjoyed his writing in the popular press for some time. And while the speech was compelling, it was laced with raw emotion and was at times short on specifics. I definitely got the idea that he would like the World Bank to do a better job of getting the wealthy nations to pony up the dough. Exactly how the dough is going to be spent was a little bit of a mystery. If his book (which I have not read, but is on my list) runs similar to the speech, I can see where Easterly is coming from.
But I do buy into the overall themes Sachs brought out. In many developing countries, roads are not being built because that is not the sort of investment that the private wealthy country donors want to make. He is outraged that we are insisting on selling mosquito nets (to prevent malaria) to countries that cannot afford them. In fact, outrage at bureaucrats who seem to have given up on ever achieving the Millenium Development Goals was definitely the tone of the speech. I'd be outraged too if I had seen the things he has seen. However, I would tread carefully when it comes to how the money is spent. We don't want to give the dictatorial regimes a blank check. It will require a more hands-on approach (involving the Peace Corps, Doctors Without Borders, and the World Bank perhaps). Because of the difficulties involved in many of these countries in making sure the money gets to the right place, I'm a little skeptical that it can be achieved at the price tag Sachs suggests. However, done right, it might be worth the higher price tag.
For his part, Easterly raises some important questions in his review--questions that deserve discussion. Easterly also wrote a book on development, The Elusive Quest for Growth. If there were ever two distinguished economists equipped for this kind of discussion, it would probably be these two. I hope that is still possible given the exchange in the Post. We sure could use it.
Posted by William Polley at March 28, 2005 2:22 PM
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Comments
Not surprising that Sachs is short on specifics. His plan amounts to basically flinging money at poor countries.
Posted by: Steve at March 28, 2005 6:34 PM
Everyone interested in this debate should read Sachs' piece in the March/April edition of Foreign Affairs. Whatever his qualities as a good economist, as Director of the UN Millennium Project he is now playing the role of fund-raiser extraordinaire. Anyone who has been in the development business for a long time should cringe when they read Sachs cavalierly speak of the "poverty gap" and that $65 per person (in developing countries) per year will provide the funding to close that gap -- so let's pour in the funds! There is every reason to think that, without some very deep changes in the aid business, pouring that kind of money in at that rate will result in enormous waste. Given his present post, perhaps Sachs can be forgiven for this simplistic gung-ho attitude. But I'm thankful there are some people around who are thinking about this more analytically and skeptically -- like Easterly.
Posted by: Chris at March 29, 2005 12:19 AM
Chris,
It is true that Sachs is talking like a fundraiser. That definitely came through on the C-Span program. As far as that goes, I don't really have a problem with it. It's good to have someone with his credentials out there pushing the issue. (The "squeeky wheel" gets the grease.) The net benefits to his writing books on the subject and appearing at the World Bank is probably positive. But you and I would agree that pouring in all those funds that he is attempting to bring in needs to be done carefully.
To me, Sachs is right on the big questions, and people who have a command of the big issues tend to make good fundraisers. He also has a pretty good idea of the goals themselves. In other words, the problem is how to get from point A to point B. To a large extent (but not totally), I'm with him on his definitions of A and B, but he doesn't say as much about how to get from here to there. That is a problem, but it's not a fatal one if we can discuss this out in the open.
Posted by: William Polley at March 29, 2005 1:22 AM