William
Easterly thinks that “home grown” development solutions, attempted by local
leaders through “trial and error” are the only solutions that could make the
lives of the poor better. He worked at
the World Bank for a long time, and clearly hated being there, because he’s against
the use of the bank and the IMF resources to require governments to implement
any set of reforms. That’s any. No leveraging loans to insist on free markets, lower internal trade
barriers, civil society reforms, human rights, you name it. Easterly thinks that bureaucracy, because it’s
a bureaucracy, can’t solve problems – even the smart development bureaucrats in
Washington, and definitely the venal local bureaucrats of the developing
world. I vaguely tire of this sort of
overkill - are government bureaucrats really so different than corporate
bureaucrats for, say, Tata, who do plenty of poverty alleviation? Are their incentives so very different? Easterly appears to buy the whole canard
about turf and budget maximization, about which there is very little empirical
evidence – I’ll bet just as much as there is for a division of a water
utility. Still, you can listen to him go
to town on development aid in this
interesting podcast.
But
I’m interested in the similarity between Easterly, the development aid skeptic
from the right, and Dani Rodrik, the skeptic from the left. Rodrik is also a “many paths” kind of
economist. He is a critic of the
Washington Consensus for development. But he believes in development aid, and runs a program that fast
tracks its graduates to the IMF and World Bank. Here’s a post by Rodrik
on Easterly and vice versa. Is this
an example of how very different ideological approaches can end up taking very
similar intellectual paths?
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1. Posted by Rav Casley Gera on April 23, 2008 @ 5:53 | Permalink
The similarities are less clear when you delve in, as Rodrik has thought carefully through the logic of his positions, whereas it sometimes seems Easterley hasn't. When Easterley talks about the failure of aid he tends to quote scary-sounding numbers ("we've wasted trillions!") without delving into much detail. Rodrik, on the other hand, knows the difference between truly philanthropic aid and aid given to awful regimes for geopolitical reasons; between emergency aid, which can't be said to have "failed" just because people are starving again a few years later, and development aid, which maybe can; and between the best examples of well-funded, co-ordinated development projects and the worst. Easterley's commitment to bottom-up is essentially ideological - he distrusts states and planners instinctively. Whereas Rodrik is a pragmatist. He knows that bottom-up projects can produce the best results, but when he sees those results, he wants to learn the lesssons and spread them throughout the aid universe. And the evidence suggests that, when done right, big-plan aid can work if you learn those lessons.
Although Easterley and Rodrik have both ended up critical of some aspects of the curent paradigm, that's not entirely surprising, as in many ways, the current paradigm stinks. But it's a little like a liberal's criticism of, say, the sub-prime mortgage crisis and a socialist's - one is based on reality and reform, while the other has found in the facts a justification for their ideology that isn't really there.
2. Posted by David on April 23, 2008 @ 14:28 | Permalink
Well, it's an insightful comment, and of course they are very different, and the right big plan could come along for Rodrik, it's true. But both are very focused on the country specific alternative.....
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