I thought a good place to start our conversation would be with one of the most fundamental arguments in development: the role of foreign aid in development, nicely encapsulated by the Sachs-Easterly debate.
You probably already have at least a half-formed opinion on this already, but if you want to mull it over some more before we all meet on Sunday, here are a few good starting points:
NICK KRISTOF, in the New York Review of Books
AMARTYA SEN, in Foreign Affairs
TYLER COWEN on Marginal Revolution (links to others as well)
Obviously, you all should bring up any questions or thoughts you have on this (admittedly very broad) issue; to start off, though, here are some of the questions that run through my mind while I read about this debate, and maybe you can help answer them for me:
- Is there an "establishment" position in this debate? I mean, do you have a good sense of whether most mainstream economists are clustered around one point on the Easterly-Sachs spectrum?
- Easterly often accuses Sachs of dusting off old chestnuts of 1950's development theory (like the "Poverty Trap" idea) that have already been discredited. That seems hard to believe... Is there really nothing fundamentally new about Sachs's plan?
- Aren't there some very basic pre-requisites for development -- I'm thinking infrastructure like roads, or electricity -- that sort of have to be a top-down effort? Is Easterly really arguing that markets can provide stuff like that in the poorest countries?
- Have you heard of any particularly good ways of evaluating whether aid is effective? I mean, everyone probably agrees that "money spent" is a terrible measure of the impact you're making, but beyond that it seems pretty tricky. Any instructive examples you've heard of ways people have tried to evaluate the success of development spending?
1 comment:
My understanding is that most development economists are more on the Easterly side. The IMF and World Bank and two of Sach's biggest critics and Easterly seems to be a critic of Sachs who is hardly getting his way. So that is evidence Easterly is "winning," esp. since the recent World Bank reforms on agriculture play into exactly what Easterly calls for (sometimes)--using aid for the basics--even though that is mostly because of people listening to Sachs.
Is there anything fundamentally new about Sach's approach? I think Sachs is mostly developing on older ideas but everyone does this refinement of theories in the sciences. His biggest pioneering research I believe is in the importance of coastal areas and infrastructure.
I don't know if Easterly is a complete market fundamentalist who would do away with public schools and public roads in the U.S. but my sense is he is not so why would he oppose public roads and schools in Africa or Asia. Most economists are definitely not close to that position outside the Libetarian party.
For evaluations: www.povertyactionlab.com
There was a good article about the lab and its two directors in the New York Times called "Making Economics Relevant" or something. I'm a student at MIT so I'm biased but I think its fair to say J-PAL is leading a revolution on econometrics for development.
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