Wednesday, April 12, 2006

Bill Easterly's "Why-Sachs-was-wrong"

I managed to attend William Easterly's talk at KSG. Although it was not the formal title of his session, he mostly talkes about his new book (a.k.a. "Why Jeffrey Sachs was wrong"). His arguments centered on several things:
  1. All the discussion on poverty trap and the need to scale up the foreing aid was basically the key arguments of the 'financing gap' school of thoughts in the '50s. We have seen it didn't work, so what makes us think it will work now? The proponents of Sachs/MDG will argue back that "it didn't work because it was too little of aid has been poured. But actually, before Sachs wrote his book, four years before Easterly had pointed out that the problem was (wrong) incentives, not the scale of aid.
  2. We've seen the weaknesses and shortcomings of centrally-planned economy and activities. That is what the MDGs are now: centrally-set, planned and administered goals, while the challenges are specific and particulars in each countries. Sachs may be right when he successfully tackled the hyperinflation in Bolivia. That sort of things may be done by centrally planned activities. But not for poverty alleviation.
  3. There will be principal-agent problems with donors, especially multiple donors. Donors are not good in administering micro policies like poverty alleviation. And they may rely on each other, resulting in a prisonners' dilemma situation. So let different agents responsible for different particular things.
  4. Aid will not be the (main) reason for growth and poverty alleviation, but local entrepreneurship will.
However, having listened to Easterly talking with his soft and monotonic voice, compared with Sachs' eloquence and passion, I know why more people listens to Sachs. And Sachs has also been two-three step ahead with his clear (correct is another thing) plans and agenda.

Plus, the Bono and Angelina Jolie factor, of course. (Well, Easterly said he may consider asking Jennifer Anniston to team up...).

1 comment:

  1. when he was in DC, giving his talk at the BAnk, he was not at all monotonic and boring. Very lively and EXTREMELY funny,i particularly loved his jokes about how he called Bono 'leading development specialist'