The Realist

by Russ Roberts on February 11, 2008

in Foreign Aid, Podcast

The latest EconTalk is here—William Easterly talking about the ideas in his two books, The Elusive Quest for Growth and The White Man’s Burden. He is remarkably unenthusiastic about the ability of the West to help the rest of the world in any grand way. Small steps, yes. Big overhauls are impossible. Growth must come from the bottom up and must be woven into the culture of the country. It must emerge. A great contrast with the optimism of Paul Collier.

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{ 8 comments }

The other Eric February 11, 2008 at 11:44 am

It's a contrast but not antithetical. The Bottom Billion looks at the macro trends needed for sustained growth but does so through an assumption of lots of small, locally controlled efforts. Easterly suggests, realistically, that this type of positive aggregation can be easily derailed by stupid policies, bad monetary management, kleptocracy and corruption, and genocidal civil wars.

A good review of evidence supporting this view is here:
http://jae.oxfordjournals.org/cgi/reprint/7/3/309.pdf

jorod February 11, 2008 at 9:29 pm

So, all this economic development is a myth? Check out Chile, South Korea, Japan, Taiwan, Thailand, Indonesia, Viet Nam, China, India…..

vidyohs February 12, 2008 at 9:26 am

I have not and will not have time to listen to this ECONTALK, but just on the face of it from the blurb above I have to point out the obvious.

As to growth coming from below and not being directed and guided by a wise leadership, I'd have to hesitate to say that.

Without the wisdom of Pinochet, Chile would still be mired in a socialist hell of poverty. There is zero evidence to support the contention that Chile would have turned around had Allende been left to complete his term(s) of office; and there is mountainous evidence to support the contention that it would have remained dead last in S. Americian economic standings.

Pinochet asked for help and he got it from Freidman and others of his knowledge. Then those ideas were implemented, not developed from the ground up, but implemented to allow growth, permit private ownership and investment.

Enough about Pinochet, hated though he is by nitwits.

My real point is this: If we accept the primise that a people, culture, nation, or society can be destroyed from the top down by bad leadership, and there is ample evidence that this is so as it has happened within our own immediate history many times over; then we must also acept the premise that wise leadership could also take a people, culture, nation, or society and direct beneficial growth from the top down.

What works at one point on the 360 degree circle to move, or weight, will also work equally well at a distance of 180 degrees from the first point.

Lennin as an example works well to show how bad leadership can make a bad situation horrifyingly worse.

Pinochet as an example works well to show how good leadership can make a horrifying situation good.

The other Eric February 12, 2008 at 2:00 pm

Jorod, why are there no African or South American examples on your list? And in Asian cases, were the "tigers" growth related to foreign aid or from internal efforts and policies?

Vidyohs, Pinochet's government did not centrally plan the economy– just the opposite. What is our point, aside from that you're making a comment without listening to the podcast or reading the books?

The other Eric February 12, 2008 at 2:30 pm

– your, not "our."

vidyohs February 12, 2008 at 9:40 pm

I believe that I clearly stated that my post was based solely on the blurb above and the meagar responses, especially to this portion of the blurb, "Growth must come from the bottom up and must be woven into the culture of the country. It must emerge. A great contrast with the optimism of Paul Collier."

I believe I stated that I did not support the bottom up idea of growth being the only effective way.

I do not believe I stated or implied anywhere that Pinochet centrally planned anything. I believe it is clear from this, "Pinochet asked for help and he got it from Freidman and others of his knowledge. Then those ideas were implemented, not developed from the ground up, but implemented to allow growth, permit private ownership and investment."

You see sir, The other Eric, there that last sentence it says "but implemented to allow growth, permit private ownership and investment." Does that read as if I were making a case for a centrally planned economy?

No, I don't think it is even implied.

Pinochet was not a socialist or communist, he was a capitalist, Central planning is the hall mark of the socialist/communist a fact that I believe I am, or should be, well known for having firmly fixed in my mind.

I then, for the mentally impaired, thoughtfully included some illustrations of bad leadership vs good leadership to support my contention that good things could come from a top down encouragement.

I know you aren't mentally impaired so I will tell you that those illustrations were to tweak the noses of those socialists we have trolling the blog, true they are, but still a tweak.

Does this clarify things for you, TOE?

The other Eric February 13, 2008 at 12:12 pm

With the cogent impact of a baseball bat to the forehead.

Troy Camplin February 15, 2008 at 2:19 pm

We would probably help most if we stopped helping at all. THen the thugs in charge of the places we are sending money to wouldn't have that money available to steal. We should only have open, free trade with countries and let them work out how they can compete and make goods to send to us. In doing so, those reforms they would make would go much farther to helping people in those countries.

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