Thursday, January 11, 2007

Book Commentary: The End of Poverty

The lead up to the holidays had me pretty busy with work, and so I was doing even less reading than normal. During my flight out to DC over my birthday weekend, I started Jeffery Sachs' The End of Poverty: Economic Possibilities for Our Time. I nearly finished it on the flight to and from Michigan over Christmas, and finally polished it off earlier this week at home one night.

Maybe I was on a development economics kick lately, what with the William Easterly book I mentioned a few posts ago. With Bono's name prominently displayed on the front (he wrote the forward), I was a bit apprehensive about the content of this book (not sure what balance it was going to strike between evangelizing pamphlet and scholarly work). With Bono being in the picture, it seemed a pretty safe bet that plenty of content on AIDS and debt relief would be on the menu!

The book is not half bad. It does do a pretty good job of making the case that most Western nations give far less foreign aid than their citizens think. By 'most Western nations', he almost entirely means the United States, as the entire book is fairly laden with America as not sufficiently generous, given its wealth. Sure, we give far more aid than any other country, in absolute dollar's just that when you rank countries by the amount of aid given as a percentage of GDP, we come out way down the list (the mid-teens, I think). He says this without a mention other forms of aid provided by Western nations, such as indirect subsidies provided to other countries (here I'm thinking of the giant indirect defense subsidy that the USA provides -- why bother having a capable military when you know that the USA has your back if things hit the fan?). In any case, the average person on the street (like the ones Leno accosts) probably would throw out figures like 20% (of GDP) for our foreign aid outlay..when it's more in the neighborhood of 0.2%. At the end of the book, he lays out a 'plan' via which an increase to 0.7% would put us on a path to completely eliminating extreme poverty by 2025. The plan is meant to be somewhat front loaded: it provides increased official direct assistance for food, medicines, technical assistance and so on, while focusing on building up the physical infrastructure and education of the citizens towards a self sustaining critical mass. It's the whole feeding giving a man food versus teaching him to fish sort of thing: getting the developing countries on a path via which they can (under their own power, with slightly downward trending ODA) continue to climb the development ladder under their own power.

This all sounds fine and good, there seems to be way too much hand waving away of the challenges. He cites all of the common developed world gripes about how foreign aid being pissed away in developing world assistance projects: loss due to corruption, loss due to insufficient social and physical infrastructure to absorb large amounts of aid, insufficient education among the populace to implement some projects, widespread AIDS, and so on. He debunks all of this with a smattering of counterexamples and not much else. His counterexamples don't seem to be sufficiently powerful to explain away the vast bulk of examples as one might find in a book like Easterly's. Simply labeling nearly all past foreign aid projects (all but the ones he was involved in...more on that later) as failures due to underfunding or poor implementation might work if done for a few cases, but he seems to use this as the reason to explain why Africa is still such a pit (in fact, the GDP per head has even dropped in many countries since the 1960s!). In general, he comes off as as the overly optimistic idealist, whereas Easterly's book had more of a ring of a bemused, world-weary pragmatist. Sachs always seems so utterly confused and dumbfounded when he talks about getting less than 100% of the money he asks for when he comes up with multi-billion dollar aid projects for this or that, always giving the impression that of course this aid project is more worthy than whatever else it is competing with for government handouts.

This brings me to the earlier thing. Reading this book, you'd get the impression that every good or successful international development economics project in the past 20 years had Jeff Sachs at the center. He writes about his instrumental role in a number of successful projects, and has glowing praise for groups with which he had to work -- such as the UN, and for Kofi (who I think he billed as the finest statesman on the planet!) in particular. Organizations with which he has butted horns: the IMF, the World Bank...he has plenty of disparaging remarks about them. Above all though, he has trash to talk about figures within the US government, particularly Republican administrations (his political orientation is never a mystery in this book). The last portion of the book has a healthy dose of anti-Bush remarks as well, but it seemed like this would be showing up sooner or later. In fact, VDH had a piece just today about the tendency to blame America first and foremost. It's a relevant read here.

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