Developmental politics

by Henry Farrell on March 28, 2005

Alex Tabarrok says that Jeffrey Sachs is descending “to the level of a third-rate politician” in his outraged response to Bill Easterly’s review of his recent book on ending global poverty; I disagree. While I’m fundamentally sympathetic to Easterly’s basic criticisms of Sachs (see my longer post on this over at John and Belle’s a few days ago), I’m also a little suspicious (as I hinted in my earlier post, and as d-squared remarks bluntly in comments) about what motivates them. A few years ago, Easterly wrote a smart and convincing book describing the World Bank’s screw-ups in development aid, which ended up costing him his job there. However, after two hundred pages of detailed examination of what had gone wrong in the past, he gave us little-to-nothing in the way of policy prescriptions as to how to improve development aid in the future – a couple of pages of vague aspirations and pious nostrums. Nor, to my knowledge, has he done much to rectify this in the intervening period. When someone repeatedly tries to take down the project of development aid as it’s been done to date, but fails to provide any concrete proposals for reform, I don’t think it’s unreasonable to speculate that he wants to get rid of large-scale development aid altogether, but doesn’t want to say so in public. At the very least, I think it’s up to Easterly to spell out in detail what his alternative approach of “piecemeal democratic reform” would actually look like in practice. It sounds like a very attractive agenda in theory – it’s certainly one that I’d be very interested in – but until and unless he spells out what it would actually involve, it’s hard to get rid of the suspicion that he’s more interested in getting rid of development aid as it stands than in creating a better system to replace it.

Update: Ivan points in comments to a long-ish working paper where Easterly apparently does lay out some positive proposals – could be that I’m being unfair here. Will read and respond.



rd 03.28.05 at 11:21 am

Easterly’s personal politics are fairly liberal, and he’s at great pains throughout the book to stress just how severe and damaging developing world poverty is, so I don’t think he has some secret agenda to do away with developmental aid. I think he’s insisting that our knowledge of what works is far less than it needs to be, and that any new large scale program launched without more knowledge is likely to come to tears. So I think his medium term project is lots of narrow gauge programs to try and hit upon successful approaches. The typical scope and focus is suggested in his response to Sachs in the Post, where he asks as an example, why did vaccination projects work and malaria eradication not in Africa? This doesn’t strike me as an irresponsible to the approach. Quite to the contrary, if the advanced economies really did try something like Sachs plan and it proved a boondoggle, the political prospects of developmental aid would be sunk for a generation.


mw 03.28.05 at 11:54 am

I was going to recommend “Seeing Like A State” — and then followed the link to Henry’s other post on the topic and see that he’s already mentioned it.

So let me suggest he might get a glimpse of what an alternative development approach might look like in David Bornstein’s How to Change the World: Social Entrepreneurs and the Power of New Ideas. Here’s a pretty reasonable review/overview:

For purposes of simplification think of the massive, co-ordinated, top-down approaches that Sachs favors on the one hand vs the Grameen Bank on the other. The Grameen Bank does not plan in any detail what the recipients of its micro-loans are going to do with the money. Rather than the ‘top sight’ of outside experts, this strategy relies on leveraging the distributed knowledge and energy of the locals.

And the emphasis on social ‘entrepreneurship’ is genuine–the Grameen Bank’s micro-loans are real loans–they are repaid, the Grameen Bank turns a profit, the proceeds are re-invested.

I found that some of the most impressive examples in Bornstein’s book involve treating citizens of poor countries not as helpless recipients of aid, but as adults who can enter into long-term financial arrangments as people in developed countries do routinely (e.g. multi-year mortgages to pay for well pumps, electric service, solar powered electric fences, etc).


ivan 03.28.05 at 12:15 pm

William Easterly has made some proposals for reforms. In essence he proposes to use market mechanisms like aid vouchers. See:


mpowell 03.28.05 at 2:28 pm

I think you can regard an author’s contribution in showing how current policy fails as valuable, even if he doesn’t offer alternative proposals or if his alternative proposals are later discredited. When you are in the thick of things in business or politics there is an expectation that, if you don’t like this idea, then what’s yours? But I don’t think this expectation should be as strong in the academic community where people are not directly responsible for policy decisions.


peter ramus 03.28.05 at 2:35 pm

Here’s a Book TV link to an event held at the World Bank recently, including an address given by Jeffrey Sachs, comments by World Bank Global Monitoring Senior Analyst Zia Qureshi, followed by a brief Q & A.

(this RealPlayer streaming video is about an hour and fifteen minutes long. )


Chris S. 03.28.05 at 4:24 pm

If a medical researcher publishes studies showing that Drug X appears to have no effect in curing a disease, I can’t see any reason why we should conclude that the researcher wants us to abandon our search for cures that do work, nor can I see why the researcher should be criticized for publishing his studies if he can’t propose any solutions that do work! In giving us the negative finding, he’s done a great service, if you ask me – especially since there is a natural bias in the aid community towards studies that purport to show that aid does work.


George 03.28.05 at 5:34 pm

Chris S makes a good point, but if you criticize the cure without proposing an alternative, you’re implicitly asserting that the status quo is preferable — or in the analogy you use (a disease and an ineffectual cure) at least no worse. As we saw in, for instance, the Iraq debate, if most people do not view the status quo as acceptable, just taking potshots at the proposed cure without offering an alternative will not necessarily work.

Which kind of stands Henry’s suspicion on its head: if Easterly has in fact failed to offer a viable alternative to Sachs’ proposal, that may or may not not make his criticism of Sachs suspect, but it does weaken it.

(Disclaimer: I read Sachs’ original FA article, about which I am hesitantly supportive, but the ensuing debate has gotten ahead of me.)


Daniel 03.28.05 at 5:47 pm

The point I would make is that anyone, no matter how well meaning, who publishes a piece of work which suggests that the aid we give to the Third World doesn’t do all that much good, is quickly going to find himself with a lot of new friends. And that, while I take your points about the value of negative critique, there is a duty on anyone who is presenting a piece of work which he knows to be quite politically convenient to nasty people, to be very suspicious indeed about his new friends, to be very cautious about accepting money from them and to be very wary of having words put into his mouth. I’m not sure that Easterly’s always been as circumspect as he might have been in this way (and independently, I think he has on a couple of occasions been really quite selective in cherry-picking examples to support various theses about those awful corrupt Third World political classes).


Daniel 03.28.05 at 5:56 pm

By the way, I really wouldn’t be so keen on the Grameen Bank as an example of what to do with development aid. AFAICS, it is very long on publicity pieces written by Western economists and surprisingly short on actual results. Gina Neff looked into it in a very good piece in the Left Business Observer and came away very sceptical. Ahhh, here’s the link.


Chris S. 03.28.05 at 6:05 pm

Actually, Easterly does try to come up with alternatives (see the working paper that Alex cites at the start of this thread), although I’m not sure they would work either. But even if he didn’t offer any, wouldn’t there be a benefit if he could convince the aid community to put more effort into coming to grips with critical underlying problems (internal problems of aid agencies and recipient country politicians and bureaucracies)? A negative finding might push others to start thinking harder rather than rehash the same old proposals to disburse more money. (There is no need in the meantime to stop doing what they are doing now, so nothing would be lost as a result of his negative findings.)


Chris S. 03.28.05 at 6:19 pm

One way to answer daniel’s point would be to treat Easterly’s criticism as tentative — but then for the major donors to launch a serious, in-depth, detailed, well-conceived, independent program to evaluate what has worked and what hasn’t worked in aid giving over the past 25 years. The major aid agencies, curiously or understandably (depending on your views about organizational incentives) have never showed a real interest in doing this, despite the lip service they pay and a few reports now and then to show they care. No one could say that this would be cavalierly aiding the cause of those who, as a matter of principle, don’t want to do help poor countries.


mw 03.28.05 at 7:39 pm

By the way, I really wouldn’t be so keen on the Grameen Bank as an example of what to do with development aid. AFAICS, it is very long on publicity pieces written by Western economists and surprisingly short on actual results. Gina Neff looked into it in a very good piece in the Left Business Observer and came away very sceptical. Ahhh, here’s the link.

Well, I have to say say I’m somewhat skeptical of the article you linked to–partly on the grounds that it’s nearly 10 years old and, somehow, microcredit has failed to be widely discredited in the interval. And the bias of the writer against markets and ‘entreprenurial’ approaches is quite obvious (a bias that I think has declined to a substantial degree in the decade since that piece was written–seen, for example, in developing nations now forcefully demanding the dismantling of trade barriers that keep them poor).

But Grameen Bank style ‘entreprenurial’ microcredit isn’t the only approach–take a look at Bornstein’s chapter about Fabio Rosa in Brazil, for example. There, the credit is not for village -based entreprenurial activity but for rather pedestrian (but important) improvements that poor farmers would not be able to afford without access to credit (low-cost electrification and irrigation, electric fencing needed to support modern cattle management practices).

Quite different than what the Grameen Bank is doing in Bangladesh, but still efficient, self-supporting, locally-directed efforts (and very much unlike the expensive, high-modernist, massive scale development projects of the kind that Easterly criticizes).


Donald Johnson 03.28.05 at 8:01 pm

I don’t have time to click on the links at the moment, but thought that Sachs wanted to pour money into mosquito nets and drugs and so forth. Seems to me like you could waste a huge amount on graft and still save a lot of lives if in the end some mosquito nets got distributed. Of course you’d save even more if you could cut down on the graft.

And yeah, people who criticize aid as wasteful should go right ahead and do it, but keep in mind that the people who will cite them have no problems wasting vastly larger sums on weapons systems where there isn’t the slightest bit of trickledown for the poor.


Donald Johnson 03.28.05 at 8:17 pm

I lied. I did have time to click on two of the links. Easterly is in no position to complain about ad hominem attacks–his review doesn’t seem designed to encourage thoughtful critique, but instead resorts to a certain amount of ridicule.

Personalities aside, I understand the concern that money will be wasted again, but when 20,000 people die every day, if you’re going to try Easterly’s small-scale approach, you’d better be prepared to do an enormous number of small-scale approaches at a time and find out which ones work as quickly as possible, or continue to watch 8 million people die each year. Easterly seems a bit too philosophical about it all–being the man of wisdom that he is, he knows that the US and Europe didn’t reach their level of prosperity overnight. So what’s the hurry?


buermann 03.28.05 at 9:04 pm

It doesn’t seem controversial that large scale, centralized projects to remedy healthcare problems are at least effective, if not efficient as they could be, have been done in the past in developing countries and are actively serving large publics in most industrialized nations, and that what is presently lacking for poor countries is, mostly, the resources to implement such solutions. If there’s anything interference will help solve it’s healthcare epidemics, and if you want the efficiency gains of decentralization just go talk to Paul Farmer. Same goes for education, public utilities, etc.

Easterly re-affirms all that in his ‘attack’, so maybe we’re all on the same side of the boat. Sachs in response seems to think Easterly was attacking something he rather re-affirmed, and so goes serious and highminded debate.

“his Big Plan is strikingly similar to the early ideas that inspired foreign aid in the 1950s and ’60s”

It seems to me, and maybe I pay too much credence to Baker & Weisbrot etc., that third world economic growth under the Big Plan of the 50s and 60s was a hell of a lot better than what came after, and maybe there was some causation to be emulated in the correlation.

Easterly: “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.”

Does this strike anybody else as disingenuous? And does Sachs actually argue that? Elsewhere – interviews with PBS I think – I’ve seen him just claim that the gradualist approaches of China/India weren’t possible in the countries he applied the electrodes to. “Gradual” is not “shock” in disguise.

And anyway the East Asian economies didn’t need a Big Plan because they had Big Plans of their own. If other poor countries could afford and were afforded the chance to persue their own industrial policies free of outside interventionism in their markets they would at least stand a chance.

And maybe Sachs puts it in the book but I haven’t heard him talk about it, but I feel that technology transfer should be an intrinsic part of this discussion and is getting short shift – particularly as concerns development’s impact on greenhouse emissions developed countries stand to benefit. Unless, that is, some ‘anti-globalist’ raises criticisms the draconian intellectual property aspects of the trade agreements that are still being aggressively pushed by the WB/IMF, even though we’ve supposedly moved beyond the “structural adjustment era”, which is the thing Sachs keeps saying that I haven’t quite been able to take seriously – Wolfeson’s reforms seem to be more cosmetic PR in response to public pressure, and Wolfowitz is being handed the helm.


ivan 03.29.05 at 9:33 am

“The point I would make is that anyone, no matter how well meaning, who publishes a piece of work which suggests that the aid we give to the Third World doesn’t do all that much good, is quickly going to find himself with a lot of new friends.”
I hope we are not on a slippery slope here. Of course accepting money from new nasty friends could be wrong, but we must also be very carefull not to fall in the trap of self-sensorship. It would be equally wrong not to defend an argument, especially when you believe it to be true, because that will give you lot’s of unwanted friends.


AdamSmithee 03.29.05 at 12:55 pm

Daniel: You admonish Easterly “to be very suspicious indeed about his new friends, to be very cautious about accepting money from them and to be very wary of having words put into his mouth” and suggest that “I’m not sure that Easterly’s always been as circumspect as he might have been in this way” -any evidence to support that? Are MIT (his publisher) or the Center for Global Development or the New York University (his employers) Republican fronts? Has he been paid off by the Heritage Foundation to fix the results of his regressions?

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