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The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics Kindle Edition
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Curing emerging market poverty is on everyone's list of priorities along with peace on earth. Yet the success has been dismal. This powerful book may help cure the ignorance of people with pat answers, do-gooders, the Seattle-Prague crowd, and economists who have neglected to keep up with the evidence. Far from dry, the book takes you to the scene, gives you the local color, and challenges you to concede that a lot of your prejudices are just that―yet in the process does not throw economics overboard. Brilliant!―Rudi Dornbusch, Ford Professor of Economics and International Management, MIT --This text refers to the paperback edition.
— Richard N. Cooper, Foreign Affairs
"It is impossible to convey the depth and range of The Elusive Quest for Growth."
— Bruce Bartlett, The Wall Street Journal --This text refers to an out of print or unavailable edition of this title.
- ASIN : B08BSTFZKL
- Publisher : The MIT Press (August 2, 2002)
- Publication date : August 2, 2002
- Language : English
- File size : 820 KB
- Text-to-Speech : Enabled
- Enhanced typesetting : Enabled
- X-Ray : Not Enabled
- Word Wise : Enabled
- Print length : 356 pages
- Lending : Not Enabled
- Best Sellers Rank: #574,695 in Kindle Store (See Top 100 in Kindle Store)
- Customer Reviews:
Top reviews from the United States
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The book is also very well-written: complex material (when it appears) is explained in terms the average college-educated person can grasp, and Easterly intersperses lots and lots of real-world anecdotes to always keep reminding the reader why we should care about this topic. And he succeeds in making us care.
In order to have any chance at all of devising policies that will actually succeed in improving the plight of the impoverished peoples of the world, we must first examine what's been tried, and understand why it hasn't worked. This is Easterly's plan for the book. For each main paradigm used to understand economic growth and development, Easterly explains the main concepts, explains the basis for the policies that were tried, and offers his analysis of why these policies failed. Easterly believes there's a common theme in understanding what hasn't worked and what might work, and he explains it clearly in his book.
If you are a teacher or student of economics, I especially recommend this book. It very nicely explains the economic intuition behind a LOT of economic theory, including some fairly recent theory that hasn't yet trickled down into undergraduate intermediate level textbooks. It also motivates all the theory with lots and lots of compelling real-world examples.
The Elusive Quest for Growth doesn't offer a balanced look at all viewpoints; that is not its goal. Easterly has a strong point of view, which I guess could be labeled "conservative." Some liberals think that conservatives care more about big business than about the poor, or labor, or the environment (and indeed there are many examples of Republican policies in the U.S. that support this view - just look at Bush's record on the environment). However, Easterly's sole concern is helping the poor, not pushing a conservative agenda down the reader's throat.
At the time I write this, there are 16 other reader reviews, only 3 of which are negative. Two of these three reviews are almost identical and must have been written by the same person ("T Biamonte from Stamford, CT USA"). This reviewer clearly disagrees with Easterly's politics, but his review in my opinion really doesn't offer any effective criticism of Easterly's book itself, not the writing, or the soundness of Easterly's analysis, or the evidence Easterly uses to support this arguments.
So I encourage you to check out this book.
The book outlines how initially both the injection of foreign aid and the role of education were seen as the key to growth. The book explains that the popularity of the idea of foreign aid was a belief that poorer countries had a shortage of capital. The injection of capital could lead to growth which would be self supporting. Thirty hears of foreign aid have shown that in the vast majority of cases the injection of capital has no effect at all on the wealth of poorer countries. Instead of development the most common result of foreign aid is the building of white elephants which have not other impact except creating huge debt payments which restrict the normal operation of the economies. In addition education is okay if there is a demand for it but money spent on education can simply lead to the training of experts who quickly emigrate.
The key to many of the problems of poorer countries comes from government. The author is not a libertarian who rejects the role of government on an ideological basis. He in fact concedes that there is no relation between taxation levels and growth. He does show how poor government can damage a country in so many ways. Chronic inflation for instance creates an environment in which it is not economically rational to produce but only to speculate. Poor government can result in the failure to build and to maintain infrastructure and services pushing up the costs of production. In so many poorer countries, manufacturers not only face the problems of developing products and selling them but they face poorly maintained roads, power grids without power, phone systems that do not work. Lastly real corruption can make the running of business and an economy impossible.
Despite the importance of corruption as one of the key reasons behind whether growth occurs or not, it has only recently been seen as something which economists would discuss.
The book is easy to read, in parts amusing but at its heart it shows how important economic growth is to enable huge numbers of people to live with the access to medical care and employment which allows for a certain human dignity. Well worth a read.
Top reviews from other countries
The Elusive Quest for Growth starts out with an examination of panaceas for development, cooked up by economists at the World Bank and IMF, which have been abysmal failures. William Easterly explains that Domer's financial gap approach to aid, which was a legacy of the Great Depression and rapid Soviet industrialisation, was applied without modification to the newly independent African States. This approach, which assumed that machinery was the key to economic development spectacularly failed to deliver development to the Third World because it was hopelessly flawed (it was intended for short business cycles in rich countries). After examining all the evidence on factors, which determine the long-term prosperity of a country, he showed that improvement in technology is the key determinant of labour-productivity and overall economic growth.
The author then goes on to examine some of the other `cures' that IFI (International Finance Institutions) have developed in the elusive quest for growth. One by one he tackles the `cures':
- Education: In itself it is as much use to a poor society that wants to grow as `hula hoops', it needs to be combined with other factors such as -wait for it - high-tech machinery or advanced technology to complement the high skills. No surprise here.
- Population control: Does not work. Even if desirable, subsidising contraceptives is not the way to go because the price of contraceptives is a minor factor in the decision to have a child. The evidence, instead, shows that, development is the best contraceptive
- Debt Relief: Has been misguided because it has tended to go to the countries with bad policies. William Easterly: "If there is any expectation that donors will continue to favour irresponsible governments in the future, then debt relief will run afoul of governments response to incentives
What I Liked about the Book
For my money, the best chapters are Chapters 11 and 12, where Mr Easterly discusses how governments can kill growth. The author states, to my surprise, "Despite the obvious importance of corruption in economic development, it has not attracted much attention from economists until recently. As a Nigerian, I don't need a Ph.D in economics to know that corrupt governments can break one's entrepreneurial spirit and kill off the incentive to invest or even to work hard.
Mr Easterly's subsequent analysis of the effect of corruption on growth is interesting; he distinguishes between centralised and decentralised corruption and posits that centralised corruption is "better" for growth, using the examples of Zaire and Indonesia. He argues that countries with institutional corruption are weak states with abysmally poor institutions. This analysis struck as me as been too dry. Surely, the fact that growth in Suharto's Indonesia outpaced Mobutu's Zaire must have been due to more complex forces. Mr Easterly's argues for institutional reform. However, the only example of a country, which established institutional reform, was Ghana. Now that's an example to scare corrupt elites everywhere because Ghana only established reform after a military coup led by Jerry Rawlings, in which he executed most of the old-style corrupt elite. Yikes!
What I did not Like about the Book
The author's analysis of the impact of ethnic diversity on growth is suspect, even puerile. His analysis is difficult to believe as he does not distinguish between correlation and causation. For example, he states that high ethnic diversity is a good predictor of civil war and genocide and that the most ethnically diverse countries are in Sub Saharan Africa. One wonders if the lack of strong conflict-resolving institutions, and not ethnic diversity, is a more plausible cause for conflict in Sub Saharan Africa.
Mr Easterly, no doubt, cares deeply about the poor. He relates his experience in several poor countries with wit and wears his knowledge lightly. He manages to avoid the matter-of-fact manner that is quite popular with economists writing about `serious' issues. However, Mr Easterly attempts to put some human stories into the numbers just to remind the reader that poverty in the Third World is not just about the sterile economic models but about flesh-and-blood people, who struggle to eke out a living every day.
While The Elusive Quest for Growth was a good read it was not as punchy as The White Man's Burden. The author seemed to think that the words `tropical' and Third World were synonymous. There were too many economic models and not enough humanity in the pages; the book seemed half-cooked. Therefore, the Elusive Quest deserves only 3 stars.
In conclusion, I would recommend White Man's Burden instead of the Elusive Quest to anyone who wants to get a better understanding of the failure of the IFI's and a more mature, worldlier William Easterly.