Exploring in the Fog of Growth: Economists' Adventures and Failures in Less Developed Countries

Author: William Easterly
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 the development process but also describes the disappointing history of official aid. The book is beautifully written with 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 M. Solow (1987 Nobel Prize in Economics laureate, 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 pill 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 carefree and prosperous life. Many times, they believed they had found such a magic pill, from foreign aid to foreign direct investment, from promoting education to controlling population, from providing loans based on reform status to meeting loan requirements based on reform status. Unfortunately, none of these measures yielded 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 various prescriptions proposed by economists and the economic theories and models upon which they are based. He argues that the problem is not with economics itself but with the various paths to prosperity revered by economists, which violate the fundamental principles of economics, namely that all economic agents (individuals and firms, government officials, and even aid agencies) respond to incentives. The author skillfully combines modern economic theory with his experiences at the World Bank, providing us with an accessible, uniquely styled, and time-tested book.