Rating: 
Summary: Deft deflation of myths
Review: This is surely the most important book published in the field of development economics for many years. The author, who is Senior Adviser to the Development Research Group at the World Bank, is highly familiar with economic theory and empirical research, and is able to expound his knowledge in an engaging and jargon-free manner. Easterly's aim - in which he succeeds brilliantly - is to show the self-defeating nature of most conventional prescriptions for development, notably foreign aid, investment in technology, education, population control and debt forgiveness. Against all these chimeras - many, if not all, of which, are desirable in their own right in some circumstances - he poses the economic common sense of provision of incentives. The argument is complex but two of Easterley's observations are especially worth noting. The professional (and almost always economically-untrained) development lobbyists are fond of arguing that what they tendentiously call the neo-liberal consensus ignores the poorest. Easterley demonstrates that this is untrue, citing the work of David Dollar and Aart Kray of the World Bank, who have found that global poverty is attributable, rather, to lack of growth. Using statistical techniques to isolate the direction of causation, these analysts find that a 1 per cent increase in per capita growth in the developing countries causes a 1 per cent rise in the incomes of the poor. Secondly, debt cancellation has become a fashionable cause for development lobbyists and the Churches - unaware, apparently, that the idea has been tried for at least 20 years (I recall it very well from my time at the Debt and Capital Markets Group at the Bank of England in the 1980s) and has resulted in a self-perpetuating cycle of bad lending. Eaterley's proposal is to tie lending to past performance (i.e. good economic management) to give Third World governments an incentive to pursue growth-creating policies. The alernative - unconditional debt forgiveness - would damage Third World living standards by ensuring a rise in developing countries' cost of capital. Easterley does not spell it out, but affluent western campaigners' demanding a course of action that the Third World would end paying a high cost for is not the most edifying of spectacles. This book puts paid to much self-serving nonsense. It is a rare gem in a quarry of dross.
Rating:
Summary: he knows his way around development economics
Review: what to say about this highly acclaimed book? that without any doubt those of you who know little of economic development will get hooked on this exciting subject. After all, everyone is sensitive to poverty and wants to see it eradicated over the world. And those with a background on the field will find it very motivating and will enjoy its reading a great deal. Just as a critical, i would say that Mr. Easterly doesn't offer any solution to have the poor economies grow (He just talks about the right incentives as the key to grow but he does not tell us what those are. It's a little dissapointing to hear such a high-qualified expert talk like that.)
Rating:
Summary: debunking myths and the east asian tigers
Review: While Easterly's book may seem targeted for economists, it's actually a book for everybody - it's needed to debunk myths that continue to prevail in policymaking. It's important that we understand what doesn't work and through a process of elimination of cure alls, we might eventually come to a solution. As for one of the reviewer's question about why Easterly attributes a lot of the East Asian Miracle to "luck"... well, being an East Asian, we don't want to admit it. It's a lot about factor accumulation or basically saving really hard for a rainy day. But there's been low productivity from technology change and all this rampant growth has tapered off. So in a sense we are "lucky" that we could save like crazy under favorable world economic conditions then... But we came undone through too much suspicious government meddling, corruption, cronyism and thinking that we were invincible.
Rating: 
Summary: Where You Sit
Review: William Easterly takes two approaches to foreign aid in Elusive Quest. Primarily, he approaches foreign aid as an academic researcher evaluating financial assistance. At MIT, at the World Bank's Development Research Center, and now at the new Center for Global Development think tank, his job has been research. Research is essentially a critical function, just as it is the job of the opposition to oppose. The researcher's predisposition to criticism is compounded by the fact that Easterly works in a semi-academic environment, in which, unfortunately, individuals prosper through controversy and rivalry. No one gets ahead (P.S., or sells many books) by saying that the general consensus is fundamentally right. Finally, as a researcher, Easterly mainly evaluates foreign aid in the form of financial assistance, where (as he points out) the aid-giver supplies money and the borrower does everything else. That's the sense in which the World Bank is a "bank". Easterly's second approach to foreign aid is quite different, as he speaks in many pages of the book as the appalled observer of living standards that are about three levels lower in hell than the "poverty" that impresses the first-time tourist in low-income countries. Not by coincidence, I don't think, do his passages written as a father echo the remarks Larry Summers used to make at about the same age, when he had just had his twin girls. No wonder therefore that Elusive Quest's conclusions seem schizophrenic! On the one hand, Easterly has little good to say as a semi-academic researcher about what the World Bank has done, while on the other hand he cannot accept as a father that his country do nothing about life in low-income countries, and thus he concludes that the World Bank is a necessary institution. In sum, readers of Elusive Quest should keep in mind that where you stand depends to some extent on where you sit. I give Easterly full marks for his vibrant (if somewhat breathless) treatment of his two points of view. At the same time, I suggest that those readers who are interested to think further about low-income countries and foreign aid should know that there are other places to sit than the two vantage points that seem to inform Elusive Quest. I agree with Easterly that financial assistance may be even more beside the point in today's world awash with mobile capital than it was in the 1950s. However, there are other forms of foreign aid than financial assistance, both for development ("technical assistance" etc.) and for relief. Alas, these other forms of assistance do cost a fair amount of money. If Easterly agrees that the World Bank might shift some of its financial might in this direction, perhaps he should bring this point to the attention of the U.S. Executive Director. Finally, there are other roles to play than that of researcher. Without implying that we should do away with research, I echo Easterly's final paragraph when I say that I hope that more folks with Easterly's gifts find those other roles.
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