12 of 14 people found the following review helpful
Bono is the devil,
This review is from: The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics (Paperback)
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.