Tuesday, August 10, 2004

Dick does Development

I've just begun one of the best books on economics I've read in a long time, The Elusive Search for Growth: Economists Adventures and Misadventures in the Tropics, by former World Bank economist William Easterly.

I've always thought that development economics as a field of study was only slightly more ethical and effective than sex tourism and the book reinforces this prejudice.

Easterly hammers nail after nail into the coffin of the theories that were naively applied to justify giving poor countries aid money. The revelation that the financing gap theories that were still being used into the nineties were based on the theoretical models of Stalin's crash industrialisation of the Soviet Union left me amazed. Like Robert Barro, he deploys a thicket of multiple regressions to support his dismissals of the supposed importance of birth control, education, capital formation and other shibboleths.

In the opening chapter he tells the story of then Vice-President Nixon visiting Ghana for its independence ceremonies. Approaching some black journalists, he asked, "So, how does it feel like to be free?" They replied, "We don't know, we're from Alabama".