Exploring in the fog of growth

Author: William Easterly / Jiang Shiming
Publisher:
Publish Date: 2005-01-01
Features: Economic growth and poverty alleviation are universal issues with general patterns. China is no exception. "Getting incentives right" was both an experience of China's successful economic reform and the root cause of many current problems. — Qian Yingyi (Distinguished Professor at Tsinghua University, Professor at the Economics Department of the University of California, Berkeley)
All students protesting free trade should read this excellent work. Easterly not only demonstrates the power of simple economic models in development but also describes the disappointing history of official aid. The book is beautifully written and offers thorough analysis. — Paul Romer (Professor at the Stanford Graduate School of Business)
William Easterly has conducted in-depth research on economic theory and the realities of developing countries. This book explores a challenging issue from a realistic perspective: how to achieve sustained economic growth in poor countries. — Robert Solow (1987 Nobel laureate in Economics, Professor at the Massachusetts Institute of Technology)
Since the end of World War II, economists have embarked on an enthusiastic treasure hunt, hoping to find a magic bullet that could make numerous developing countries as wealthy as the rich nations of Europe and North America, allowing the poor people there to live a life free from hunger and worry. Many times, they believed they had found such a magic bullet—from foreign aid to foreign direct investment, from promoting education to controlling population, from providing loans based on reform status to meeting loans based on reform status. Unfortunately, none of these approaches delivered the expected results. Where did the problem lie? Was it the economics that economists revered, or the prescriptions they proposed?
In this book, based on his in-depth research on the realities of developing countries, the author examines the various prescriptions proposed by economists and the economic theories and models they are based on. He argues that the problem is not with economics itself but with the various paths to prosperity that economists have hailed as magic bullets, which violate the fundamental principles of economics—that all economic agents (individuals, businesses, government officials, and even aid agencies) respond to incentives. By skillfully combining modern economic theory with his experiences at the World Bank, the author provides us with an accessible, uniquely styled, and timeless book.