Why do I think Jeffrey Sachs is a dangerous man?

I have always been suspect of Bono's evangelical campaign to cancel Third World debt. But I am even more appalled he has taken to the grand vision of one Jeffrey Sachs, the one time Harvard and now Columbia University economist who gave us the mess in Russia otherwise infamously known as shock therapy disguised as economic reform. Leaving Russia in shambles of sorts, Sachs has since moved on to bigger things and more perilous ones. He has a new book, The End of Poverty: Economic Possibilities for Our Time, which unfolds into "utopian social engineering" and an uncritical audience; Time magazine opened up its pages to him recently. But his overreaching plan is set for failure in that it is partly built on western liberal guilt about the human condition in Africa and partly because it calls for massive infusions of aid to be borne by taxpayers in the industrialized First World. And of course he trusts the United Nations to pull it all together. Sachs is a dangerous man because he cannot see history repeating itself. Not a time for Big Plans from a man who doesn't believe in going slow or "piecemeal" as they say in the development business.

The noted economist William Easterly sums it up better than I ever will in the Washington Post.

Sachs pays surprisingly little attention to the history of aid approaches and results. He seems unaware that his Big Plan is strikingly similar to the early ideas that inspired foreign aid in the 1950s and '60s. Just like Sachs, development planners then identified countries caught in a "poverty trap," did an assessment of how much they would need to make a "big push" out of poverty and into growth, and called upon foreign aid to fill the
"financing gap" between countries' own resources and needs. This legacy has influenced the bureaucratic approach to economic development that's been followed ever since -- albeit with some lip service to free markets -- by the World Bank, regional development banks, national aid agencies like USAID and the U.N. development agencies. Spending $2.3 trillion (measured in today's dollars) in aid over the past five decades has left the most aid-intensive regions, like Africa, wallowing in continued stagnation; it's fair to say this approach has not been a great success. (By the way, utopian social engineering does not just fail for the left; in Iraq, it's not working too well now for the right either.)

For more on Easterly, read my brief review of his stupendous book, The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics.