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Jeffrey Sachs and The End of Poverty

Note: This post is more or less a book review of Jeffrey Sachs’ book, The End Of Poverty, which came out in 2005 (a whole decade ago), and he has since written other books on development economics. His flagship development project Millennium Villages, launched in 2005, should be publishing final results sometime soon, but the evaluation has been controversial, especially after Nina Monk’s somewhat disillusioned book The Idealist (2013) came out about Sachs and the project.

More on Sachs, and on William Easterly, will be up soon.

 

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Jeffrey Sachs’ book, The End Of Poverty, has rightfully been at the center of the development economics debate since it was published in 2006. While his optimism comes off as unrealistic and saccharine at times, his basic framework is grounded enough in reality to paint a truly inspiring picture of the very possible extermination of extreme poverty.  While there is some unpacking to do, Sachs develops a theory dedicated to a results-oriented, methodical, scientific approach to fighting poverty, and supplies lots of valid critiques of the international aid scene.

Sachs clearly defines himself as believing that comprehensive, multi-national, multi-pronged plans are needed to get individuals and nations out of poverty for good. He knows he knows how to fix poverty, and he knows it’s going to take a lot of international aid. Easy enough, right? He hooks you (and himself) in with the story behind his  (successful) economic policies in Bolivia and Poland, convincing you that development economics is relatively easy, and all fits in his neat little theory. Then he ups the difficulty (and complexity) setting from his (much less successful) experience in Russia to ideas about China, then India, all the way to the big one: Africa.

As an effective altruism fanboy, I of course love his “clinical economics” approach, whose “differential diagnosis” admits explicitly that development is complicated and regionally unique. He readily admits that development is messy, complex, prone to mistakes, and lacking proper monitoring and evaluation, and that the present-day system congratulates itself on inputs rather than outputs (Sachs himself seems to succumb to this last enticement from time to time). All in all, his logical, big-picture approach appears to separate him greatly from the stereotypical bigwig, bureaucratic ‘Planners’ of the development economics world.

He points out many often unacknowledged factors that make economic growth particular difficult, including: physical geographic features (being landlocked without cheap access to ports, mountainous, no good network of rivers, poor soil, low rainfall); lack of infrastructure (especially low quality roads); unique disease burden (unique geography, weather, or mosquito breeds); cultural barriers; and geopolitics (trade barriers and sanctions, crushing international debt).  The world isn’t fair, and some countries got an extremely bad hand (often with some external colonial or cold-war meddling to boot), and many pro-market, pro-democracy demagogues refuse to acknowledge that.  I’d heard of the “paradox of plenty” before, but I’d never thought about the crushing transport costs involved with mountainous terrain, or how useful it is for a country to have sea ports. He gives a fairly convincing, eye-opening history of the world that explicitly points out how arbitrary factors like these can be responsible for the history of worldwide development, and that the racist and tribalist social theory of colonialism is largely trumped by more or less random factors (Acemoglu and Robinson really critique Sachs on this in Why Nations Fail, but that’s for another blog post).

Sachs often berates the work of the International Monetary Fund (IMF) and World Bank, who offer macroeconomic advice and loans (often at economic gunpoint) to undeveloped countries. He sees much of their work as simplistic, unrealistic, neocolonialist, and paternalistic, and often just plain economically incorrect, and with good reason. Of course, Sachs has time and again offered macroeconomic advice to governments, which is basically what IMF does, but it seems like Sachs is actually working with the government of, say, Bolivia, not dictating orders as an outsider. Regardless, Sachs really is a planner through and through, but it’s possible that’s not a  bad thing. Scaling up and combining interventions that are relatively proven and individualized for each country is going to require a lot of planning (and bureaucracy). If you want to alleviate poverty quickly, you’ve got to go all in right?

Unfortunately, we have plenty of anecdotes from the last 30+ years of developmental aid of slow and wasteful bureaucratic aid, and in spite of himself Sachs seems partial to bureaucracy (he basically brags about the number of people in teams working under him for the UN Millennium Project). He’s in this strange in-between place where he is correctly critical of all the failures of previous big aid attempts, but completely optomistic that this time, we’ll get it right. For example, he  positively beams about the Millennium Goals while simultaneously acknowledging that many of them are simply failed goals from decades ago, slated anew for the new century. How many times are we going to move the goalposts? Sachs seems to walk this line a lot, giving politics and bureaucracy a lot more credit than I would, even as he disparages them.

Then again, maybe I’m just not willing to admit how much organization and planning is necessary to try to solve poverty all over the world as quickly as possible.

My biggest complaint about Sachs relates to his work combating AIDS in Africa, and it represents a flaw that may unravel his entire argument. His success focused on getting more funding (input) by proving that later stage HIV treatment was manageably expensive (he was right). But late stage HIV treatment, while politically tractable, is a huge waste of money and resources, and he does the world a huge disservice by not focusing funds on preventative measures. With late stage treatment, number of patients treated is a pretty useless output, since zero of those treated patients is cured, they just have their suffering (greatly) reduced, then they die. When there are other diseases (like malaria) with a cure that costs many orders of magnitude less per person, and when AIDS prevention is relatively cheap and relatively effective, this choice is extremely costly. Isn’t Sachs’ whole point in this book is that we have to fix the problem at the source, not with a Band-Aid? Sachs’ flowery rhetoric in this section makes me wonder what else in the book sounds great, but has deep flaws hidden under the surface that I can’t see.

Some big things:

  •  I agree with what seems to be Sachs’ core concept, that ending global absolute poverty (living on under USD $2 a day)  is totally possible, if not by 2025, then within my lifetime.
  •  I buy his argument that debt relief is a must (and we should mostly do away with loans as a form of aid).
  • I also agree with the other core concept that the world, and America especially, needs to throw a lot more money at this problem. This sounds flippant, but it isn’t.  The rich world can absolutely afford to exterminate extreme poverty, even with the  inefficient and wasteful approach we often currently take. The many (many) billions required is a drop in the bucket of the world economy. And it really is a one and done deal (on a decades time scale): one very, very, large investment that will eventually stop being necessary. The US has already symbolically committed to aid in the form of .07% of GDP, and it is a moral failure that we refuse to commit to it. Aid needs to be made politically tractable (something Sachs has been very effective at doing).
  • Sachs has sufficiently convinced me that for a growing number of countries, lack of donor money is a bottleneck for beginning a path toward self-sufficient growth (now that I’ve read Why Nations Fail, maybe not so much).

While Sachs is talking about public aid throughout the book, he does make a plea to rich individuals in the United States at the end, in line with effective altruist Peter Singer’s argument in The Life You Can Save, which came out two years later. Their conclusions are the same (Singer being directly influenced by Sachs): absolute poverty can be ended relatively quickly for relatively little money (if you are mega rich or the GDP of the entire world).

In any case, a lot of optimism is needed to fight the fight to end poverty, and Sachs has it in spades. He lays out a consistent, thorough, and multilayered approach to ending poverty, and I believe it could work, although I am markedly less optimistic about its effectiveness. We’ll just have to see if he can prove his claims.