Rating: 
Summary: A plan for economic realism in the world
Review: Independent of planetary location, the fundamental rule of economics remains the same. It is "people respond to incentives." This is as hard a fact as there can be in the social sciences. However, the key questions that vary due to culture, time and location are "What incentives are they responding to now?" and "What incentives should be offered to stimulate economic growth in the future?" For decades, the economic and financial experts that control the organizations such as the International Monetary Fund (IMF) and the World Bank (WB) have been miserable failures. They dictate the circumstances of aid and loans to third world countries and the record of economic growth of the recipient countries has been abysmal. This book is a record of the naiveté of the controllers, their inappropriate development models and the general errors made.
It is an incredible and very sad fact that most of the developing countries have lower per capita GNPs now than they did decades ago when they achieved their independence. Billions of dollars of direct aid and additional billions of dollars in loans that have been forgiven have had little impact, and in many cases have made matters worse. There are several reasons for this and Easterly establishes most of them. The economists that create the development models for the IMF and WB were educated and raised in the western tradition and so, are blinded to believe that what works in the U. S. and Europe will work everywhere. They have failed to alter their perceptions to conform to local conditions. Their first failure was their lack of understanding of what incentives the people were responding to when the failures took place. Their inability or unwillingness to obtain the appropriate reforms so that people would be offered the appropriate incentives that will work locally then compounded the problems.
Of course, not all the failures were due to inappropriate models. Ethnic and tribal rivalries that have led to civil wars are difficult to defeat with economic weapons. A government with few legal restrictions on how much they can take from the public purse can siphon off billions of aid dollars. Easterly describes many of the situations that have happened and offers a simple economic model as to how the graft problem can be overcome. If there is a strong leader who also centralizes the corruption, then all payments will go directly to the leader. This will avoid the extremely inefficient situation where every police officer you encounter must be bribed. We all understand the convenience and efficiency of consolidating our payments. Furthermore, since the leadership is earning a percentage of all economic activity, it is advantageous for them to encourage economic growth by keeping the percentage low. A smaller percentage of a larger pie can be much bigger than a higher percentage of a shrinking one.
Easterly's conclusion for the solution to the lack of growth in many third world countries is to have a benign dictatorship. Have political power consolidated in a strong leader who also centralizes the graft. Furthermore, in an act of enlightened self-interest the leader allows the economy to follow a generalized path of free markets, removing most controls, causing it to expand in the natural way economies usually do when stimulated.
This is one of the best books on comparative economics that I have read and it should be studied by all Westerners who have a simplistic solution to world economic problems. To argue that democracy and free markets are the answers is to be foolish and incorrect. Many of the economically disastrous governments that have existed were democratically elected. Easterly uses the populist governments of Argentina and Venezuela as examples of the destruction that can be wrought by democracy misapplied. Some of the freest markets in the world are in third world nations, where decisions are sold to the highest bidder.
Finally, there is one very interesting point to note. The book cites a survey of international business leaders concerning the most graft-ridden countries. All were ranked on a scale of 0 to 6 where 0 had the most graft and 6 was the most free of graft. The United States was ranked at a five and there were some countries rated as a six.
Rating:
Summary: The "take-off" theory of industrial growth...
Review: ... has long since crashed and burned. Many other economic solutions for the problem of Third World poverty have been tried and most have failed miserably. Import substitution, currency devaluation to stimulate exports, debt forgiveness, and more recently currency boards and dollarization. Look no further than the current situation in Argentina for a spectacular example of the failure of dollarization. Recent events are only the immediate reminders that the policies of the World Bank and the International Monetary Fund (IMF) have a long history in a lot of countries of not being able to make a positive difference. Indeed in many countries of the Third World or the "tropics" as Easterly euphemistically calls these countries, the citizens see an arrangement with the IMF as a prescription for social and economic pain. Easterly asks how is it that these institutions with significant capital to lend have been unable to foster development? And why, with intelligent economists (including Easterly himself) and bright policy makers on staff, has the World Bank been unable to make improvements; in fact contributing to making some things much worse? Easterly is perceptive with his questions and unflinching in answering that many of the problems originate within his own organization. He says the problem can be as simple as not asking the right questions. In the face of data which showed educational levels throughout the tropics rising steadily and poverty still remaining a constant, Easterly is critical of those who didn't even ask the most basic question of "education for what?" The central argument of the book and why it remains THE ELUSIVE QUEST FOR GROWTH is that there has been a reluctance to match aid to incentives. Governments like people respond to inducements and the challenge is to find the right balance and weighting to incentives between donors, governments, and the people. The book is well written and Easterly offers anecdotes from his personal experiences which adds color to what could otherwise have been a dull academic exercise. Even if it were dull (it's not) there was little chance of the book being ignored. Easterly offers a unique perspective of the critical "insider" and he offers some interesting insights. Economists will of course enjoy this book. Unfortunately it may not get a much wider readership and that's a pity because Easterly was deliberate in making the book non-technical. It's also broad enough to appeal to a general audience, but the question remains: Who's interested and who's reading this? That's not a question Easterly would ask of economists but of our general American reading public. It's also a question that will only become more relevant as globalization remains the ultimate economic goal.
Rating:
Summary: Well written
Review: A great read. Easterly obviously cares about his subject, and manages to expand on his main theme [people respond to incentives] in an [nerdily] entertaining and analytical precise method. An interesting viewpoint on a timely problem. It's worth your time.
Rating: 
Summary: shows the difficulty of development
Review: After WWII, economists tried to give adivise to the third world in hopes that they would become industrialized like foreign aid, education and economic theories like the solow-growth model. However a lot of these countries are worse off now then in the 40s and 50s because of lower incomes and political instability. Through the book, Easterly looks at what went wrong lik how foreign aid not dealing with government corruption or requiring governments to follow certain policies. It also looks at how certain countries like the asian tigers got to where they are and how certain latin american countries were able to stabilize their economies after decline. He also looks at the problems of the third world like corruption and ethnic strife and they adversely affect growth.
Rating:
Summary: No Easy Answers
Review: An economist at the World Bank, Easterly looks back at the dismal economic record of the Third World over the last 40 years and distills lesssons to guide donors and policymakers in the future. He is at his best when dissecting failed policies such as population control or structural adjustment loans, which were embraced by development experts of the day but rested on faulty logic and flopped in practice. The rest of his book contains fascinating, nuanced discussions of how bad governance, "poverty traps," and plain bad luck (such as terms of trade shocks) can keep poor countries trapped in vicious cycles of poverty. Many myths are exploded, such as the belief that poor nations are destined to "catch up" with rich ones, or that international investment flows to capital-poor states in an effort to find higher returns. The text is clearly written and filled with wry humor. However, the failure to discuss how "Asian Tigers" such as Korea, Singapore, and Taiwan broke out of poverty and achieved industrial take off -- at one point, Easterly half-seriously cites "good luck" as a key explanation for their 30-year record of sustained economic growth! -- is a glaring hole and results in my rating of only four stars.
Rating:
Summary: Plain, simple, and back to the basics.
Review: As some of the findings in this book are astonishing, the author backed every conclussion made in this book with indisputable facts. I was stunned to find out that, as developing countries invested more in public education in the last 30 years, their respective growth rates actually declined! This, and other insights in this well argued book (like the failure of investment to promote growth) are based on one very simple principle: individuals respond to incentive, good or bad. We economists sometimes forget that.
Rating: 
Summary: Mostly Good-but aimed at economists
Review: Easterly asks some very important questions. Why are so many of the world's people so poor? Especially since first world governments give so much to poor countries. It turns out 1) becoming a rich country isn't easy and 2) often the economists at the world bank and imf don't use basic economics to implement their policies.
Easterly does a great job in some chapters of explaining virtuous circles, vicious cycles, and the economics of lending. Unfortunately, he does not explain the terms he uses. The book is filled with jargon. Chapters 6 and 7 are almost identical. Chapters 2 and 3 discuss economic growth models in a manner that would only be clear to someone who already knows the models. Even very good students are baffled by these two chapters.
Easterly is a smart guy, but he needed a good editor.
Rating:
Summary: debunking myths and the east asian tigers
Review: Easterly does indeed cover the history of economic development, and he magically creates the image of poor people who just never had the right incentives. I will not argue with his historical accuracy, this part of his book is straightforward enough. Indeed, any competent historian could have related an equivalent story. However, where Easterly falls short of his title of being an economist is in that of what to do next. People need the right incentives... ok what now. Martin Feldstien gave us his theory, Robert Solow threw his hat in the ring, and as such they are economists, however all Easterly is is an economic historian offering very little advice as to what is next.
Rating:
Summary: A nice review of economic history
Review: Easterly does indeed cover the history of economic development, and he magically creates the image of poor people who just never had the right incentives. I will not argue with his historical accuracy, this part of his book is straightforward enough. Indeed, any competent historian could have related an equivalent story. However, where Easterly falls short of his title of being an economist is in that of what to do next. People need the right incentives... ok what now. Martin Feldstien gave us his theory, Robert Solow threw his hat in the ring, and as such they are economists, however all Easterly is is an economic historian offering very little advice as to what is next.
Rating:
Summary: Impeccably researched, though dry and repetitive
Review: Easterly is an economist who wishes to explain why, despite some massive effort, do some economies grow, and some don't. He delves into what people thought were the magical panacea's to growth, first machine investment, then education, then infrastructure, then aid, then debt relief, and so on. He then refutes each and every one of the suggested solutions. Easterly worked at the World Bank, so he knows what he's talking about. Even though not biting or cynical, he doesn't sugar coat anything. His first few chapters are dry and repetitive in the way that he explains how investing alone will not allow poorer countries to catch up. The following chapters do tend to flow better, though the repetitiveness still remains. It felt like he was switching back and forth, writing to a general audience on some chapters, writing like a educational thesis on a few chapters. Sometimes he'd make a convincing argument to something, but the actual point won't come until much later. Easterly, takes all the myths that most economists believed, and squashes them. Even though he uses anecdotal evidence, he backs up all his points with solid statistics, giving much credibility. It is clearly evident that Easterly has taken fifty years of attempted economic growth incentives, and explained what went wrong in a concise manner. To me, there were some glaring omissions. He never explains why a few countries' economies actually did catch up. He also doesn't bring cultural aspects into the realm. He doesn't refute or accept work ethic differences. Is a country's historical and cultural identity and work ethic influential to it's growth? That is a question that I would have loved to find out. To those who take interest in these types of economic quandaries, this book is right up your alley. Not altogether readable, it is very informative and well researched.
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