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Summary: Simply superb!
Review: If you are going to read only one book on globalization in your life, then this is the book to read. It is clear and concise, simple and appropriate, and (rare in this day and age) beautifully written.
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Summary: delightful read for PhD economists
Review: If you spent 4+ years in graduate school learning about macroeconomics and teaching watered down versions to undergrads, this is a really fun read. All those old-timer theories that seemed to have simply been orphaned in the literature are given a well-deserved empirical refutation. I think we learn so much by acknowledging the explicit failures of previously popular theories, and it sets economics apart from other social sciences.Easterly has just the right amount of experience, technical training, and compassion for his subject. Someone should send a copy to Bono of U2 and all the other commentators who think development is as simple as debt foregiveness and good intentions.
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Summary: Please read this book before you vote.
Review: In agreement with the other reviewers I feel this is an excellent book on economic development. The most important point this book makes is simply throwing resources at social problems do not change things for the better over the long haul. I would like to make one point that seems to have escaped the attention of many. I cannot help but notice the parallels between what this book shows NOT to have worked in countries all over the world, yet are continuously expounded by "advocates" and politicians as just what we need here in the United States. What does work much more effectively is is changing incentives to encourage people to better themselves. This means less centralized planning and less forced reallocation of private resouces. Not more expensive government programs that make typically make almost everyone (including those it was intended to help) worse off.
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Summary: Quest for future growth in Africa
Review: In William Easterly's book The Elusive Quest for Growth (2001)he points out that in the past African countries have borrowed heavily because they were willing to mortgage the welfare of future generations to finance their generation's (mainly the government clientele's) standard of living. In addition to incurring high debt, irresponsible governments sold off the national assets (oil, diamonds, etc) in order to live well while their people remained mired in poverty. African governments have often chosen destructive policies because they act in the interest of a particular class or ethnic group and not in the interest of the nation. Easterly demonstrates that neither aid nor investment nor debt forgiveness has proven to be the answer to developing African countries that have bad governments. He emphasizes that only African governments displaying a fundamental shift in behavior should receive aid or be eligible for debt relief.
Easterly believes that a favorable climate for new generations of business people and entrepreneurs which encourages them to invest in knowledge, machinery, technology and skills is essential for Africa's future growth and development. Things like high inflation, black markets, corruption, high interest rates, high budget deficits, restrictions on free trade, and poor public services create poor incentives for growth. He proposes that a just rule of law, democracy, independent central banks, independent finance ministers, and other good quality institutions are needed to stop the endless cycle of bad policies that perpetuate poor growth in Africa. Easterly would agree that for Africa to have a bright future Africa must be a democratic continent with institutions that protect the rights and interests of minority groups, and that protect the right of private property and individual economic freedom. Governments must be faced with the right incentives to create private sector growth. Easterly envisions an Africa in which governments do not devote themselves to theft, but in which governments provide a national infrastructure -- health clinics, primary schools, and well-maintained roads -- and assistance to the poor within each society. He encourages the World Bank, the International Monetary Fund and other donors to only support aid to African governments that can present credible intentions to build a national infrastructure, to give aid where it will help the poor the most. Maybe then the quest for future growth in Africa will succeed more than it has for the last fifty years.
Easterly suggests that poor countries can leap right to the technological frontier by imitating technologies from industrialized nations. He recommends that African governments and world organizations encourage this transfer of technologies from industrial nations to developing nations. Easterly points out that electric power, a phone line, and a computer translate to a vast store of knowledge on the Internet. He believes the decentralized nature of the electronics revolution could be very good for Africa.
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Summary: Populism...
Review: is a word that would generally describe this work. My professor in macro economics requested us to use it as a reference for the development part of the course and I think it was a mistake. I would recommend Stiglitz's "Globalization and Its Discontent" instead, the general tone of which is less annoying when criticizing IMF and WB (and every other organization involved) in their efforts to help developing countries to cope with their overwhelming problems. Some references sited by the author are inconclusive and the reasoning is quite weak. Moreover, the fact that he has been fired from one of those organizations that he himself criticizes makes the impartiality of his judgements questionable.
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Summary: Bono is the devil
Review: It's January 2005 and the media is awash with calls for long-term aid & debt relief for the 'poor' countries hit by the Sumatra Tsunami. You don't need much of a brain to work out who means well and who (once again) is showboating. For those who genuinely want to know how best to help troubled peoples, this book is an indispensable set of ideas - although, Sri Lanka aside, the rapidly growing countries that were hit by the tsunami aren't actually poor at all.
In his quest for growth, William Easterly takes us through all the interventionist strategies (like debt-relief and international aid) that have been tried in the past 60 years to drag poor nations up from the gutter and he conclusively shows that all of these non-market based solutions have failed. Not failed to hit the targets aspired to by their proponents. But failed utterly to make even a dent.
Easterly then goes on to bring two trends to light. One, that there are dozens of reasons why countries remain poor - bad government, corruption, natural disasters, socialism, war, polarised societies & disease to mention a few. And two, that democratic countries which protect property rights, uphold the rule of law and have good quality services that allow private sector investors to flourish tend to become richer over the long-term - if progress isn't derailed by unforeseen disasters that wipe out large swathes of the active population.
There are also splendid bits on why aid very often harms countries since a large amount of it is political or budget spending & most ends up in the pockets of repressive/corrupt regimes who waste it and use the funds to stay in power. Or why debt-relief is normally only prescribed as a `solution' by people who either don't understand finance or who don't like rich people.
And in contrast to a previous reviewer, I though Easterly was particularly clear on the best way forward. That is to offer individuals a stake in their future by giving them every opportunity to succeed on their own without aid, government dependence or corruption - whether through tax incentives, small business schemes or microeconomic aid that is only allocated to countries which state clearly, in advance, how and when they will use it (subject to checks by independent third parties).
In all, The Elusive Quest for Growth is terrific and after reading it again over Christmas I'd recommend it to anyone thinking seriously about how the world might be made a better place for everyone. Aid addicts & debt deflators beware though, this book makes it clear that you are partly to blame for world poverty. Five stars.
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Summary: Economics......the root of all evil in the modern world
Review: Ive read this book and I can tell you it stinks.....unless you are a soulless capitalist bent on world anihilation and conquest......an overview of everything that is wrong with the human race......
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Summary: A must for anyone interested in economic development.
Review: One of the most important lessons of this book, is to demonstrate that the magic "elixirs" economists have been developing in the last 60 or more years, in order to create wealth in developing countries, have been almost a complete failure. It doesn't matter where we are positioned before economic development in Latin American countries; we must read, discuss and extract the right conclusions of Mr. Easterly's book. We have lost years and several generations trying to convince us we are going to be able to grow and create wealth with the magical elixirs. I think is time to go back to basics and to reality: right incentives. Mr. Easterly has done an excellent job in this sense.
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Summary: Welfare doesn't work!
Review: The Elusive Quest For Growth is a painfully obvious book to a Republican. It is written by a courageous International Monetary Fund/World Bank insider Ph.D. economist who rebelliously and whistle blowingly speaks the truth, i.e., the billions and billions loaned(given) to desperately poor countries all over the world has been totally wasted. It seems so obvious. When you give people/countries money as the IMF/WB does, they waste it. When they have to earn it, they don't waste it and real economic growth begins. But to Democrats, Socialists, and Communists there is always the heartfelt and oh so sensitive belief that central gov't brainiacs can quickly create just the right loan or program at just the right time and in just the right way so everyone will soon grow rich and civilized and live happily ever after. It has never worked but apparently because Democrats are just too silly to understand Capitalism they keep trying and trying and trying the only thing they can imagine, but at the cost of millions and millions of lives.
American AFDC(welfare) didn't work and for the same reasons neither does the IMF/WB and all the other ... versions of big gov't that the Democrats love so much. The intellectual complexity of capitalism is too great for too many people and so, even in the 21 Century, the Democrats keep finding new allies and new votes and new programs destined to fail.
Interestingly, while the author clearly is stating life saving Republican principles he never says he is a Republican or even a capitalist. Such labeling is clearly avoided by almost every human being on earth. It would be an indication of partisanship and partisans have a cause, a point of view, or ax to grind, and hence cannot be trusted to tell the plain truth. So, oddly, we pretend to be neutral or intellectual. We want to imply, "oh, I just happened on the truth; it never even occurred to me that my recent scientific discoveries exactly support what the Republicans have been saying since Thomas Jefferson. This sad hypocrisy creates a very huge problem: if you establish the truth but don't say it is the Republican truth how on earth will voters connect it to the Republican Party and vote accordingly?
So, I give this book 5 stars for telling the truth and no stars for not stating that it is the Republican truth. For a book not afraid to establish the truth about the entire range of Republican positions I recommend "Understanding The Difference Between Democrats and Republicans."
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Summary: The Emperor's Clothes
Review: The Elusive Quest for Growth, by Bill Easterly, a senior advisor in the research department of the World Bank, is a must read for anyone interested in global development. Its appeal lies in its unprecedented reach and candor in surveying the assumptions and theories underlying the development assistance provided by richer countries and international agencies to poorer countries. Easterly's conclusion is that the emperor (the international aid industry) has almost no clothes. While one can quibble with the specifics of some of his analysis, the overall effect is a compelling, authoritative book that makes it impossible to avoid facing the fact that the current aid framework needs a radical overhaul. The aid industry has spent about 1 trillion dollars over the last forty years, and the returns have been disappointing. Fortunately, Easterly points the way toward the beginning of a new wardrobe. There's bad news and good news. The bad news is that nearly all of the theories that drive the design of aid programs are not borne out by the experience to date. Most fundamentally, the formal mathematical models underlying the macroeconomic analyses of organizations such as the World Bank and IMF are built on two plausible but wrong assumptions. The first of these is that investment drives growth. Unfortunately, the record shows that investment only drives growth in those few cases where it is made in conjunction with appropriate technology, know-how, and a sound overall economic policy environment. The second wrong assumption is that aid increases investment. Extensive analysis indicates that most governments simply consume rather than invest the aid they receive. The striking thing about these two faulty pillars of the development paradigm is that even the best aid organizations continue to use a framework that they know is wrong. Easterly also takes a sober look at fads that have swept through the field of development. The first of these is education. Many people argued that investment in basic education is the key to stimulating growth, and this has led to massive investments and high hopes. Unfortunately, in retrospect the evidence shows little correlation between education investment and growth. The same holds true with population control, where the link between population dynamics and growth has proven to be far more complex that originally expected. Easterly does not conclude that the evidence shows that education or population planning is unimportant; to the contrary, they can be effective but only in a broader context where other important conditions are also present. What are some of these broader conditions that must be in place? Fortunately, we have made some progress in understanding what helps counties develop economically and socially. In particular, there is strong evidence that economic growth is the best way of reducing poverty in developing countries. Contrary to what many think, a one percent increase in overall income in a country tends to translate into a one percent increase in the income of the poorest. And we do know that economic growth itself requires countries to maintain policies that avoid certain pitfalls-in particular, high inflation and budget deficits, excessive black market premiums for their local currencies, negative real interest rates, corruption, and restrictive trade policies. If we know at least the minimum policies required for growth and poverty reduction, then why don't most countries adopt them? Thus began another chapter in the history of development aid. Beginning in the 1980s, the World Bank, IMF, and others launched a large number of 'structural adjustment' programs designed to support countries' adoption of these policies. Twenty years later, it is clear, however, that many of these programs were ineffective. There is little evidence that aid has had any influence on countries' policies. Instead, policies seem to be driven by the self-interest of the policy makers and the interests they represent. Easterly's refrain in the book is that 'people respond to incentives,' and this is clearly true at the macro-policy level as well as the household level. One leading edge of thinking about development draws on the simple observation that people tend to associate with people like themselves. Well educated people with access to financial resources, technology, and know-how-some of the main ingredients for economic growth-tend to congregate with and learn from each other. This creates a virtuous cycle for them. Unfortunately the same dynamics hold for the poor. The poor, who tend to be less well educated, have less access to financial resources, technology, and know-how, also tend to congregate with each other. Consequently, the opportunities for learning, investment, and growth are lower. This raises the obvious question of how we can increase interaction between rich and poor, between the more advantaged and less advantaged. This leads us to the current state of affairs, and ironically offers hope for a common ground between traditional policy economists and the critics of aid and globalization. Many of the critics are implicitly or explicitly arguing against corruption and/or policies that are implemented in a way that make the rich richer and the poor poorer-something that the policy economists agree with. Few people nowadays would disagree on the desirability of low inflation and budget deficits, a fairly valued currency, interest rates that encourage savings, and trade policies that don't force consumer to overpay and that give incentives for people to produce and export goods that can generate wealth. The real issue is: How do we get governments to adopt these policies? And how can countries put in place the institutional capacity and governance arrangements that will ensure that good policies are fairly implemented? And how can we increase the direct connections between rich people and poor people? These are as much political and social challenges as they are economic ones. And they require the policy economists and social activists not to butt their heads together, but to put their heads together to find a solution.
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