The Elusive Quest for Growth: Economists' Adventures and


The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics ❴Reading❵ ➹ The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics Author William Easterly – Thomashillier.co.uk Why economists attempts to help poorer countries improve their economic well being have failedSince the end of World War II, economists have tried to figure out how poor countries in the tropics could Why economists attempts to help poorer Quest for MOBI õ countries improve their economic well being have failedSince the end of World War II, economists have tried to figure out how poor The Elusive Epub / countries in the tropics could attain standards of living approaching those of countries in Europe and North America Attempted remedies have included providing foreign aid, investing in machines, fostering Elusive Quest for Kindle Ñ education, controlling population growth, and making aid loans as well as forgiving those loans on condition of reforms None of these solutions has delivered as promised The problem is not the failure of economics, William Easterly argues, but the failure to apply economic principles to practical policy workIn this book Easterly shows how these solutions all violate the basic principle of economics, that people private individuals and businesses, government officials, even aid donors respond to incentives Easterly first discusses the importance of growth He then analyzes the development solutions that have failed Finally, he suggests alternative approaches to the problem Written in an accessible, at times irreverent, style, Easterly s book combines modern growth theory with anecdotes from his fieldwork for the World Bank.

    The Elusive Quest for Growth: Economists' Adventures and not the failure of economics, William Easterly argues, but the failure to apply economic principles to practical policy workIn this book Easterly shows how these solutions all violate the basic principle of economics, that people private individuals and businesses, government officials, even aid donors respond to incentives Easterly first discusses the importance of growth He then analyzes the development solutions that have failed Finally, he suggests alternative approaches to the problem Written in an accessible, at times irreverent, style, Easterly s book combines modern growth theory with anecdotes from his fieldwork for the World Bank."/>
  • Paperback
  • 360 pages
  • The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics
  • William Easterly
  • English
  • 23 November 2019
  • 0262550423

About the Author: William Easterly

William Easterly is Professor of Economics Quest for MOBI õ at New York University, joint with Africa House, and Co Director of NYU s Development Research Institute He is editor of Aid The Elusive Epub / Watch blog, Associate of the National Bureau of Economic Research and Co Editor of the Journal of Development Economics He is the author of The White Man s Burden Elusive Quest for Kindle Ñ How the West s Efforts to Aid the Rest Have Done So Much Ill and So Little Good Penguin, , The Elusive Quest for Growth Economists Adventures and Misadventures in the Tropics MIT, , other co edited books, and articles in refereed economics journals William Easterly received his PhD in Economics at MIT He was born in West Virginia and is the th most famous native of Bowling Green, Ohio, where he grew up He spent sixteen years as a Research Economist at the World Bank He is on the board of the anti malaria philanthropy, Nets for Life His work has been discussed in media outlets like the Lehrer Newshour, National Public Radio, the BBC, the New York Times, Wall Street Journal, the New York Review of Books, the Washington Post, the Economist, the New Yorker, Forbes, Business Week, the Financial Times, the Times of London, the Guardian, and the Christian Science Monitor Foreign Policy magazine inexplicably named him one of the world s Top Public Intellectuals in His areas of expertise are the determinants of long run economic growth, the political economy of development, and the effectiveness of foreign aid He has worked in most areas of the developing world, most heavily in Africa, Latin America, and Russia William Easterly is an associate editor of the American Economic Journals Macroeconomics, the Journal of Comparative Economics and the Journal of Economic Growth Taken from his website.



10 thoughts on “The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics

  1. Chris Chris says:

    Recently went back and re read this book As other reviewers mentioned, I am curious to see what Easterly would say of thisoptimistic earlier work, but regardless this text is an excellent, accessible history of economic development in the 20th century Easterly explains the progression of economic thought and the fate of the latest and greatest foreign aid ideas spurred by ever changing growth theories.Contrary to some of the spurious one line reviews below, this book is definitely not Recently went back and re read this book As other reviewers mentioned, I am curious to see what Easterly would say of thisoptimistic earlier work, but regardless this text is an excellent, accessible history of economic development in the 20th century Easterly explains the progression of economic thought and the fate of the latest and greatest foreign aid ideas spurred by ever changing growth theories.Contrary to some of the spurious one line reviews below, this book is definitely not the work of a laissez faire ideologue Easterly is, however, quite critical of the aid establishment s record though, once again, optimistic about the potential for aid as poor gov ts grow increasingly competent and decreasingly corrupt.Easterly is concerned with economic growth, and he adroitly explains how aid of all shapes and forms has largely failed to positively impact development If you d like to see some of the good aid has done, you will have to look to improvements in quality of life, not the subject of this book, which can be found in Charles Kenny s draft The Success of Development How much credit should go to NGOs and how much to commercial firms who lowered the price of living well through technological innovation is up for debate, but it s important to remember that Easterly is talking specifically about the aid establishment s impact on economic growth.Highly recommended, along with White Man s Burden, Daron Acemoglu, Douglas North s new book, Dani Rodrik s articles, and yes some Collier too Just ignore Sachs

  2. Camille Camille says:

    William Easterly may have still been a little idealistic when he wrote his first major book While his cases are interesting, his general thesis remains that altogether the World Bank and IMF aren t so bad, they just mess up a little After the publication of his latest manuscript White Man s Burden , it s funny to think what Mr Easterly would say today That said, his book is a good introduction to international economic aid development aid from the perspective of an Economics wonk Given William Easterly may have still been a little idealistic when he wrote his first major book While his cases are interesting, his general thesis remains that altogether the World Bank and IMF aren t so bad, they just mess up a little After the publication of his latest manuscript White Man s Burden , it s funny to think what Mr Easterly would say today That said, his book is a good introduction to international economic aid development aid from the perspective of an Economics wonk Given the two broad camps of development, it is interesting to understand the logic underlying the Economics camp, which is often critiqued for being out of touch with the real life impacts and fallout of their policy prescriptions Easterly is one of the first contemporary writers, after Sen and Stiglitz, to begin a critique of the conventional wisdom and tactics used within the Economics camp, specifically the World Bank IMF camp, itself

  3. Jim Jim says:

    This is an outstanding book If you are interested in economics, or how the world works you should read this An outstanding discussion about how first world foreign aid to developing nations just doesn t help Outstanding writing, and easy to read, comprehend After you have read it, it is worth reading a book by Jeffery Sachs Ending Poverty in our Time The contrast between the two authors and their approaches is well worth understanding Since both are decent writers the concepts they expre This is an outstanding book If you are interested in economics, or how the world works you should read this An outstanding discussion about how first world foreign aid to developing nations just doesn t help Outstanding writing, and easy to read, comprehend After you have read it, it is worth reading a book by Jeffery Sachs Ending Poverty in our Time The contrast between the two authors and their approaches is well worth understanding Since both are decent writers the concepts they express are well within the grasp of general voting public Sachs and Easterly are in a bit of a war of words about economic growth Both distinguished scholars, both fighting it out with ping pong op eds in the Washington Post and other papers

  4. Frank Stein Frank Stein says:

    Unquestionably the best book I ve read all year.William Easterly, a former economist at the World Bank, effectively criticizes the misguided policies of the Bank and the IMF over the last 50 years, and shows how faddish and rarely examined economic theories caused these institutions to pour trillions of dollars into undeveloped countries with almost nothing to show for it The critique is made evenpoignant because Easterly still sincerely believes that economic growth in the Third World ca Unquestionably the best book I ve read all year.William Easterly, a former economist at the World Bank, effectively criticizes the misguided policies of the Bank and the IMF over the last 50 years, and shows how faddish and rarely examined economic theories caused these institutions to pour trillions of dollars into undeveloped countries with almost nothing to show for it The critique is made evenpoignant because Easterly still sincerely believes that economic growth in the Third World can change lives for the better he peppers the book with intermezzos, short vignettes of poverty and struggle in poor countries , and he still believes the First World has a duty to help He just admits we haven t found a viable solution to Third World poverty quite yet.The book starts by showing how a 1946 paper by Evsey Domar, on capital expansion during business cycles, somehow became the fundamental model for international aid for the next 60 years, even though the model had nothing to do with Third World growth and Domar explicitly repudiated it by 1957 Yet, once combined with the take off growth theory of Walt Whitman Rostow published in 1960 , the simple belief that economic growth only required filling the funding gap between saving and investment has guided the Bank up to the present day Easterly then goes on to examine how the pure investment in machines, factories, dams, and infrastructure that this theory encouraged actually does little to promote growth in many countries like Guyana investment aid could reach as high as 8% of GDP even as growth was sharply negative He explains the New Growth Theory led by Robert Solow, Paul Romer, and Robert Barro, which has overturned our old conception of growth, and shows how technology and virtuous circles are essential for maintaining positive results.He also attacks many of the simple solutions proposed by development economists to end Third World poverty For one, education cannot explain the gap between rich and poor countries otherwise capital would move to educated workers in poor countries, in reality educated workers in poor countries move to rich countries to work with capital there He also shows that population growth has almost no correlation with economic growth, and therefore attempts to increase per capita wealth through birth control are doomed population growth declined in the 1970s to 1990s even as Third World per capita growth declined in tandem He also attacks debt forgiveness programs, which have actually been going on since the 1979 forgiveness of 6 billion in debt to 45 poor countries Every round of debt forgiveness since has only caused profligate and corrupt governments to spend their countries into an even deeper deficit Cote D Ivoire used cheap concessional loans to build two new capitals in two successive presidents hometowns Unfortunately, the most indebted countries are usually the most corrupt, and they know that their waste encouragesforgiveness and thenloans, creating a dangerous and vicious cycle.This book was written back in 2000 so many of his critiques have become incorporated in bank policy since that time, but this is still a fantastic book on development history Perhaps what is most exciting though, is his demonstration that ideas can have real consequences, for good or ill, and that thoughtful change can be a real force for good in the world Despite the often depressing subject matter, I frankly found the book inspiring

  5. Wendelle Wendelle says:

    1 this book s official motto people respond to incentives Aid should have been made conditional on matching increases in the country s national savings rate This is the book s central idea and official recommendation however, isn t it true that IMF tried this by imposing harsh requirements of austerity on loans or aid on countries, and it didn t help, as Joseph Stiglitz notes about Brazil s previous situation.2 The book s central message is that global aid is based on a failed economic 1 this book s official motto people respond to incentives Aid should have been made conditional on matching increases in the country s national savings rate This is the book s central idea and official recommendation however, isn t it true that IMF tried this by imposing harsh requirements of austerity on loans or aid on countries, and it didn t help, as Joseph Stiglitz notes about Brazil s previous situation.2 The book s central message is that global aid is based on a failed economic model, the Harrod Domar model The author explains that the Harrod Domar model suggests that economic growth grows proportionally with investment and savings Economic growth is key for per capita increase in income, the only other alternative for the poor to be richer is wealth redistribution Poor countries have low investment, and therefore cannot get economic growth through investment Therefore, donors can help countries to achieve economic growth by compensating for lack of investment with aid money Thus, the financing gap between savings and investment is closed with free aid The author thinks this is a failed model because it assumes the recipient country will use aid for investment, when in reality, he says, they just use it for consumption.3 The author says that technological innovation, not investment, is key to economic growth, because investment will always be injured by diminishing returns.4 The author says it s fallacious to believe that technological change is bad for workers because it puts them out of work the Luddite fallacy, one of the silliest ideas he calls it This is a fallacy, he says, because labor saving technology is identical to output per worker increasing technologyWithoutput per workers, there isincome for each worker This seems to assume that the profit goes to the workers, instead of accumulating well into the capitalist pockets of Jeff Bezos, who definitely wins from the acceleration of automation in his business Marx will have something to say about the author s ideas as quoted above.5 The author says education contributes to economic growth mostly in countries with minimal potential for lobbying the government He claims education as a driver of growth works best when people are incentivized to see it as an investment for their future However, is this really a good thing Sure, the quest for top education is a great incentivizing force in hypercompetitive countries such as South Korea However, this causes great levels of desperation too, as the cost of failure academically is very steep, causing the person to be left behind in society.6 Leaks, matches, and traps explain how a wrong environment can curtail a poor individual, or how the right environment can help a rich individual

  6. Branimir Branimir says:

    This is the first book I read from W Easterly and I am really satisifed with the level of detail and his approach Caution it is not a light read due to the plentitude of information and facts that are stored inside thus somewhere in the middle I needed a rest, thus taking anothr book.Easterly has worked for the World Bank as an economist and senior adviser at the Macroeconomics and Growth Division As such he has experience from the kitchen that allows him to summarize what has been done This is the first book I read from W Easterly and I am really satisifed with the level of detail and his approach Caution it is not a light read due to the plentitude of information and facts that are stored inside thus somewhere in the middle I needed a rest, thus taking anothr book.Easterly has worked for the World Bank as an economist and senior adviser at the Macroeconomics and Growth Division As such he has experience from the kitchen that allows him to summarize what has been done in the past years by the big world economies for the problems of the financially hindered countries He shows why even though there is vast amount of cash that is poured in projects that should enbetter the life of many, results are not so impressive He also compares the measurable effects based on the staring point of eachmarket where measures has been applied.It s an interesting and educational read, for sure The book is good for those that want to get another point of view of some of the worlds problems and consider why some seemingly easy solutions has negative impact on the whole system

  7. Oliver Kim Oliver Kim says:

    A nice primer on development economics circa 2000 Lots of good stuff here on the failure of aid and debt relief, as well as a nascent recognition of the importance of institutions In hindsight, Easterly was a tad too pessimistic the next twenty years of data, driven by China s growth, were probably better than anyone hoped for But given how poor development s track record was, I suppose pessimism was warranted.Even for an academic, Easterly is a poor writer, but shining through his wooden A nice primer on development economics circa 2000 Lots of good stuff here on the failure of aid and debt relief, as well as a nascent recognition of the importance of institutions In hindsight, Easterly was a tad too pessimistic the next twenty years of data, driven by China s growth, were probably better than anyone hoped for But given how poor development s track record was, I suppose pessimism was warranted.Even for an academic, Easterly is a poor writer, but shining through his wooden prose is a genuine concern for people in developing countries Little vignettes on the lives of ordinary people separate each chapter Some of the stories are heartbreaking A good reminder for economists, buried in their theories, not to lose sight of the human

  8. Cricket Kaya Cricket Kaya says:

    An overall good introduction to development economics However if you re an optimist, you might have some trouble with this book, as I did He rarely reflects on the possibilities of development and mostly focuses on past failure Which is important, just kind of rough for an optimist to continue reading.

  9. Eric Eric says:

    Easterly isconcerned with witticisms than he is in a full fledged analysis of the principles of growth All of his wisdom for growth comes straight from the neo liberal playbook except for a few situations in which government can step in to pick up the slack where social benefits will be greater than the benefits won by entrepreneurs, as in the case of technological innovation As is common in the scientific economic literature, a berating of do gooders is obligatory, and Easterly does Easterly isconcerned with witticisms than he is in a full fledged analysis of the principles of growth All of his wisdom for growth comes straight from the neo liberal playbook except for a few situations in which government can step in to pick up the slack where social benefits will be greater than the benefits won by entrepreneurs, as in the case of technological innovation As is common in the scientific economic literature, a berating of do gooders is obligatory, and Easterly doesn t shy from his hard nosed dismissal of anyone he thinks is silly enough to ignore the universal law of unintended consequences or the economic rationality of every decision humans make Therefore, anything people may attempt to do that is outside of the law of supply and demand is bound to createproblems Generally, I think this is a load of BS, and evento the point, is plain old subterfuge This book, as do most books by professional economists, hide the nature of capital and the dynamics of power involved in capital

  10. Kevin Vejrup Kevin Vejrup says:

    The book presents plenty of interesting concepts related to development economics and complement them with great historical examples It does seem a bit unstructured by shifting between theory, historical examples, empirical evidence and unrelated personal stories from poor countries Put the mind to work, but doesn t change ones perspective of development economics significantly.In the 1950 s where the first African countries got independence Ghana 1957 , the most supported growt theory was th The book presents plenty of interesting concepts related to development economics and complement them with great historical examples It does seem a bit unstructured by shifting between theory, historical examples, empirical evidence and unrelated personal stories from poor countries Put the mind to work, but doesn t change ones perspective of development economics significantly.In the 1950 s where the first African countries got independence Ghana 1957 , the most supported growt theory was the gap financing Harrod Domar model According to which growth depended on investment, and as savings were low, aid should finance investment.Robert Solow wrote in 1956 57 that growth was not determined by investment in steady state , but by technological progress Solow did not apply the model to poor countries and Easterly argues that it should not have been.The Luddite Fallacy is the silly idea that technological progress will lead to unemployment, whereas it really allows increased production The name stems from workers in Nottingham in 1811, who lost their jobs to knitting machines and therefore smashed them.Easterly shows the poor effect of adjustment loans loans to promote policies of growth , which were very used to a great extent from 1970 s to 1990 s The adjustment loans were poorly set up and had perverse incentives for both donor and receiver.The solution to growth is increasing returns to knowledge That is the idea that a skilled individual isvaluable together with an individual with the same skill knowledge beingcomplements than supplements.Backward areas have an advantage in implementing new supplemental technology as they have not vested interest in the old technology it is replacing These arguments are exemplified by economic historian Mokyr in the English loss as technological leader after the industrial revolution Path depency also explains technological progress, i.e camels who has no use of roads caused a path depency towards few roads and railroads Other technologies are complemental technology that benefits from existing technologies , which supports status quo.He reviews government policies that ruin growth by good use of examples Inflation of Israel in 1973 1985 Black markets due to fixed exchange rates in Jamaica and Ghana Budget deficit in Mexico from 1970 by the Redistribution with Growth program leading to inflation, fall of fixed exchange rate in 1982 and defaulting on government debt Restrict trade due to infant industry argument thus restricting specialisationBesides these policies corruption and internal division can hinder growth Internal division is examplified by Ghana, where the majority Akan groups set up a huge tax on cocoa, which were produced by the minority Ashanti group More generally he finds that countries with high inequality arelikely to establish growth hindering redistributional policies, like Hugo Chavez in Venezuela written before the fall of oil prices The opposite situation of minority elites in power may be why the Roman Empire, Ming Dynasty, the Mughal Empire or the Ancient Egyptiants did not start the industrialization East Asia growth miracles benefitted from lower inequality and less ethnically diverse than South America and Sub Saharan Africa

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