Sachs Wants More, Easterly Wants Less, But the Answer is Neither

The Easterly reading was an interesting read and in many places, I agreed with his arguments. I found it interesting that a large portion of the book was argued directly against Jeffrey Sachs who believes that more aid is beneficial to the poorest developing countries. I do agree that solutions need to be tailored to the local context, which allows the Searchers to be more practical and make impact, albeit on a smaller scale. However, one can imagine the following scenario. For instance, a Searcher builds a brand new school catering to the needs and cultural context of the region in order to address the lack of formal education. However, the efficacy results are subpar because students are not able to concentrate in class if they are malnourished and have no energy to learn. Therefore, a Searcher in another town focuses on reducing the number of malnourished children with vitamin injections, food programs, etc. Instead, these kids become healthier but they don't go to school and instead help their parents tend the fields for economic survival. In another village, daughters are incentivized to go to school and get an education like their male counterparts because of another Western initiative to close gender income gaps, however, the patriarchal culture leaves women out of jobs and no opportunities to start business even with an education.

The point is, Easterly talks about the importance of the local context; however, there is the concern that small-scale reforms are too small scale and don't address the complexity of the issues at hand. If you focus on one at a time in the trial and error format Easterly discusses, that is almost just as inefficient as trying to solve everything in one go.

My last piece of beef with him is that he writes a 400 page book on how the West has thrown so much money at these countries with very little results, which is a depressing thought. Not only that, but he leaves very little room at the end for solutions to fixing this problem. Yes, he mentions from the very beginning that readers who are looking for his grant plans of fixing Africa are missing the point of the book altogether - that there is no such grand plan. However, he is also making sweeping generalizations that no plan is the best plan. Based on a situation like the one above, it seems like some type of coordination of efforts would make all the initiatives more effective.

Sachs wants more aid while Easterly wants less. However, the answer is never black and white because that would just be too easy...Instead there needs to be a combination of aid along with other interventions. While these two economists provide valuable discourse for development economics, there is a third person who examines the issue from a slightly different lens: Paul Collier, author of the Bottom Billion. Collier argues that aid is important, but there are other structural issues that need to be dealt with along with the small scale interventions: conflict trap, natural resource trap, landlocked with bad neighbors, and bad governance in a small country. He mentions the curse of civil wars in particular and how the poorer countries have a higher likelihood of engaging in civil war, which then reduces GDP per capita even more. Collier's research shows that once a country slides into the worst levels of poverty, it tends to remain in that category for roughly 50 years, "costing the affected country and its neighbors an estimated $100 billion in lost income. The price of experiencing civil war is higher still.  Collier and Hoeffler estimate that the average conflict-torn developing country loses at least 105 percent of its pre-war GDP simply by virtue of experiencing conflict, and can cause neighboring countries to lose 43 percent of their pre-war GDP.  Assuming the average GDP of low-income countries is $19.7 billion, Collier’s conservative estimate is that the average civil war today costs developing countries about $54 billion." (http://www.brookings.edu/views/papers/rice/poverty_civilwar.pdf) Although I do not fully understand the data, the following Harvard economic paper talks about the impact of civil war on GDP as well. Essentially, there is more to what Easterly argues in his book, and it is not about simply providing less aid .