Easterly on Sachs

Read Tyler’s post below for more reactions to Sachs’s The End of Poverty.  Here are some key grafs from William Easterly’s review.

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." It would shy away from the hubris of what he labels
the "breathtaking opportunity" that "we" have to spread democracy,
technology, prosperity and perpetual peace to the entire planet.
Large-scale crash programs, especially by outsiders, often produce
unintended consequences. The simple dreams at the top run afoul of
insufficient knowledge of the complex realities at the bottom. The Big
Plans are impossible to evaluate scientifically afterward. Nor can you
hold any specific agency accountable for their success or failure.
Piecemeal reform, by contrast, motivates specific actors to take small
steps, one at a time, then tests whether that small step made poor
people better off, holds accountable the agency that implemented the
small step, and considers the next small step.

…[Sachs] seems unaware that his Big Plan is
strikingly similar to the early ideas that inspired foreign aid in the
1950s and ’60s. Just like Sachs, development planners then identified
countries caught in a "poverty trap," did an assessment of how much
they would need to make a "big push" out of poverty and into growth,
and called upon foreign aid to fill the "financing gap" between
countries’ own resources and needs. …Spending $2.3 trillion (measured in
today’s dollars) in aid over the past five decades has left the most
aid-intensive regions, like Africa, wallowing in continued stagnation;
it’s fair to say this approach has not been a great success. (By the
way, utopian social engineering does not just fail for the left; in
Iraq, it’s not working too well now for the right either.)

Meanwhile, some piecemeal interventions have brought
success. Vaccination campaigns, oral rehydration therapy to prevent
diarrhea and other aid-financed health programs have likely contributed
to a fall in infant mortality in every region, including Africa.

…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….

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.


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