A Modest Proposal

Linked with William Easterly – USA, with Center for Global Development, with The Development Research Institute dri, and with The West Can’t Save Africa.

Reviewed by William Easterly, March 13, 2005; Page BW03, about THE END OF POVERTY, Economic Possibilities for Our Time, by Jeffrey D. Sachs. Penguin Press. 396 pp. $27.95:

Jeffrey D. Sachs’s guided tour to the poorest regions of the Earth is enthralling and maddening at the same time – enthralling, because his eloquence and compassion make you care about some very desperate people; maddening, because he offers solutions that range all the way from practical to absurd. It’s a shame that Sachs’s prescriptions are unconvincing because he is resoundingly right about the tragedy of world poverty. As he puts it, newspapers should (but don’t) report every morning, “More than 20,000 people perished yesterday of extreme poverty.”

That appalling toll has given Sachs his life’s mission. Two themes recur in his long career of advising heads of state in poor nations, which he chronicles in fascinating detail in this book. First is his favored approach of “shock therapy” (a term he dislikes but has found impossible to shake): a comprehensive package of economic reforms that attempts to fix all problems simultaneously and quickly.

Second is his conviction that the West should always give a lot of money to support these packages. These two themes unify a book that sometimes seems like a disparate collection of Sachs’s adventures in Bolivia, Poland, Russia and Africa on issues ranging from stopping high inflation, leaping from communism to capitalism, canceling Third World debt, curing malaria and AIDS, and now eliminating poverty in Africa and everywhere else.

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The climax of The End of Poverty is Sachs’s far-reaching plan to end world poverty — a sort of Great Leap Forward. His characteristically comprehensive approach to eliminating world poverty derives from his conviction that everything depends on everything else — that, for instance, you cannot cure poverty in Africa without beating AIDS, which requires infrastructure, which requires stable government, and so forth.

Social reformers have found two ways to respond to this complexity; Karl Popper summed them up best a half-century ago as “utopian social engineering” versus “piecemeal democratic reform.” Sachs is the intellectual leader of the utopian camp.

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What’s the alternative? The piecemeal reform approach (which his book opposes) would humbly acknowledge that nobody can fully grasp the complexity of the political, social, technological, ecological and economic systems that underlie poverty. It would eschew the arrogance that “we” know exactly how to fix “them.”
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Indeed, the broader development successes of recent decades, most of them in Asia, happened without the Big Plan – and without significant foreign aid as a proportion of the recipient country’s income. Gradual free market reforms in China and India in the 1980s and ’90s (which Sachs implausibly argues were shock therapy in disguise) have brought rapid growth. Moreover, the West itself achieved gradual success through piecemeal democratic and market reforms over many centuries, not through top-down Big Plans offered by outsiders. Do we try out shock therapy only on the powerless poor?

“Success in ending the poverty trap,” Sachs writes, “will be much easier than it appears.” Really? If it’s so easy, why haven’t five decades of effort gotten the job done? Sachs should redirect some of his outrage at the question of why the previous $2.3 trillion didn’t reach the poor so that the next $2.3 trillion does. In fact, ending poverty is not easy at all. In those five decades, poverty researchers have learned a great deal about the complexity of toxic politics, bad history (including exploitative or inept colonialism), ethnic and regional conflicts, elites’ manipulation of politics and institutions, official corruption, dysfunctional public services, malevolent police forces and armies, the difficulty of honoring contracts and property rights, unaccountable and excessively bureaucratic donors and many other issues. Sachs, however, sees these factors as relatively unimportant. Indeed, he seems deaf to the babble and bungling of the U.N. agencies he calls upon to run the Big Plan, not to mention other unaccountable and ineffectual aid agencies.

So, in Sachs’s eyes, what does matter in producing poverty? His book blames the perception of bad government in Africa on racial prejudice in the West, an insult to the many courageous Africans who have protested against their often appalling rulers. To Sachs, poverty reduction is mostly a scientific and technological issue (hence the technical jargon above), in which aid dollars can buy cheap interventions to fix development problems.

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The danger is that when the utopian dreams fail (as they will again), the rich-country public will get even more disillusioned about foreign aid. Sachs rightly notes that we need not worry whether the pathetic amount of current U.S. foreign aid — little more than a 10th of a penny for every dollar of U.S. income — is wasted. Foreign aid’s prospects will brighten only if aid agencies become more accountable for results, and demonstrate to the public that some piecemeal interventions improve the lives of desperate people. So yes, do read Sachs’s eloquent descriptions of poverty and his compelling ethical case for the rich to help the poor. Just say no to the Big Plan.

William Easterly, a professor of economics at New York University, is the author of “The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics.” (Read the whole article on The Washington Post Company.

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