Sunday, March 19, 2017
William Easterly The Elusive Quest for Growth Economists' Adventures and Misadventures in the Tropics MIT Press, Cambridge, Massachusetts, 2001, 342 pp., $29.95 (cloth).
For the past fifty years, economists have tried to determine how poor countries in the tropics can attain standards of living approaching those of Europe and North America. This quest has been motivated by the striking and often pitiful contrast between the sufferings of the poor and the comforts of the rich. A range of remedies have been advanced or attempted—including foreign aid, investment in machinery, education, birth control, and debt forgiveness—but none has delivered as promised. The poor countries have simply failed to grow as expected. Indeed, the region where poverty was treated most intensively, sub-Saharan Africa, has failed to grow at all, while growth in other regions of the world has been affected by erratic development and sudden crises.
In this stimulating and lively book, Easterly, a senior advisor at the World Bank and former advisor to Finance & Development, argues that the root problem is not a failure of economics but a failure to apply economic principles to practical policy work. Too often, he writes, economists have peddled formulas that violate the basic principle of economics: that private businesses, government officials, and individuals—even aid donors—respond to incentives. If we ensure that all involved have the right incentives, he argues, then development will follow.
Easterly notes the widespread disappointment with the lack of progress that has led disaffected protesters in the West to call for abandoning the quest altogether. This is not acceptable, he stresses: "As long as there are poor nations suffering from pestilence, oppression, and hunger . . . and as long as human intellectual efforts can devise ways to make them richer, the quest must go on."
Written for the general reader, the book will fill an important niche in enlarging public understanding of a vital issue. One of its most attractive features is what Easterly calls his "intermezzos": snapshots of daily life in the Third World, based on his own experience, that are inserted between chapters. These serve to remind us that "behind the quest for growth are the sufferings and joys of real people, and it is for them we go on the quest for growth."