Receive the Bulldog Edition


Economic Blogosphere

Economic Journalists


economicprincipals.com banner

July 3, 2005
David Warsh, Proprietor


| contents |

Highways for Africa?

New York Times columnist David Brooks is withering in his scorn for Jeffrey Sachs, the globe-trotting advocate for the world’s poor. Sachs, a Columbia University economist and the author of The End of Poverty: Economic Possibilities for Our Times is “a child of the French Enlightenment,” says Brooks. (Not just the Enlightenment, mind you, but the French Enlightenment!)

“The Bush folks,” Brooks continues, “at least when it comes to Africa policy, have learned from centuries of conservative teaching — from Burke to Oakeshott to Hayek — to be skeptical of Sachsian grand plans.”

Sir Bob Geldof, on the other hand, is withering in his scorn for David Brooks. Sir Bob is the rock star who has organized a series of concerts and demonstrations around the world this weekend to press the eight leading industrial nations (whose leaders are meeting in Scotland next week) to step up their aid to African nations

“I am withering in my scorn for columnists who say, ÔIt’s not going to work,’” says Sir Bob, former lead singer of the Boomtown Rats.

Once again, meliorists, who want to undertake measures to make the world a better place, are arrayed against thoughtful conservatives, who fear that such schemes may backfire and undermine the very natural processes they seek to promote. What do you think about the prospects for the diminution of poverty in Africa? Take this simple test.

Try to imagine a network of divided four-lane highways the length and breadth of the continent, such that you could drive from Cairo to Capetown, from Casablanca to Dakar to Brazzaville to Mombassa, and never leave the fuel and motel complexes that had grown up around the entrance/exit ramps.

It is relatively easy to imagine roads such as these, because they’ve already been invented.  They started as Autobahnen in Germany in the 1930s, spread to North America in the 1950s, migrated back to Europe and Japan, to Mexico and South America, the Middle East, India, Southeast Asia, China and most of the rest of the world.

It is only slightly more difficult to envisage the array of other technologies developed elsewhere that is in the process of being imported to Africa by Africans. These include (for example) cell phone systems and Internet computers, hybrid plant strains and modern farming methods, sanitation systems and skyscrapers, agricultural extension services and banks specializing in micro-lending, commercial legal codes and, of course, plenty of M-16 and AK-47 rifles.

This is the point Sachs makes, over and over again. The blueprints for the many miraculous things we have learned to do are relatively easily transferred. Take Bangladesh. When the former East Pakistan won its independence in 1971, the nation was synonymous with extreme poverty — 100 million people living on a flood plain.  Per capita income has roughly doubled since then, life expectancy has risen from 44 years to 62 years and infant mortality has declined from 145 of every 1,000 babies born who die within a year of birth to 48 — all of this thanks mainly to its bourgeoning garment trade.

What happens when a poor country becomes an attractive place for high-tech enterprises to conduct part of their production processes? (“High-tech” being defined to include the garment business that East Asian, American and European designers brought to Bangladesh.)  Incomes rise. Knowledge of manufacturing and management techniques begins to spread. Locals quit and go into business for themselves.  “I believe the single most important reason why prosperity spreads, and why it continues to spread,” Sachs writes, “is the transmission of technologies and the ideas underlying them.” Bangladesh is now among the nations with divided highways.

Sachs himself is a good example of the development of new ideas and technologies in the business of fostering economic development.  He started out in the late 1970s as very talented by otherwise relatively run-of-the-mill macroeconomist, with little interest in the developing world. Then came the Third World debt crisis of the early 1980s and, in 1985, an invitation from a former student to consult to the government of Bolivia about its hyperinflation. Success in La Paz brought invitations to Poland, Slovenia, Russia, Mongolia; a steep personal learning curve and a widening circle of acquaintances.

All the while, dramatic changes were taking place in technical economics. Sachs incorporated them in his thinking, too, and made his own contribution with a series of papers on geographic distress, which led directly to his current focus on African nations. The centerpiece of The End of Poverty is a seven-heading checklist Sachs calls a differential diagnosis (his wife was for many years a pediatrician). “When I arrived in La Paz, I had almost no checklist at all,” he writes. By the time he left the city, he had become a clinical economist.

(The point about recent advances in development economics is made even more strongly in The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics by William Easterly, who was for many years a senior staffer at the World Bank. Easterly surveys in some detail the disappointments of the international lending organizations that were created after World War II, and presents the more micro-economically-sophisticated dogmas of the present day.)

More than anyone else, Sachs is responsible for the current focus on making aid to Africa a sustained project. His friendships with UN Secretary General Kofi Annan and rock star Bono have something to do with it. So does his sense of mission, and his energy level. (“His passion is operatic,” says Bono. “He’s not just animated, he’s angry.”) But mostly it’s the analytic snap of the argument, beginning with the series of technical papers back in the mid-1990s, with which Sachs and his co-authors forcefully reintroduced geography and ecology to economic theory.

“Most societies with good harbors, close contacts with the rich world, favorable climates, adequate energy resources, and freedom from epidemic disease have escaped from poverty,” he writes. “The world’s remaining challenge is not mainly to overcome laziness and corruption, but rather to take on geographic isolation, disease, vulnerability to climate shocks, and so on, with new systems of political responsibility that can get the job done.” Standard accounts of African poverty focus on poor governance; Sachs’ version begins with the prevalence of disease, and emphasizes the importance of malaria treatment and prevention, aggressive research on other tropical diseases, and research policies against the AIDS epidemic.

The interesting thing is that nobody has to explain these things to the Bush administration. The 43rd American president has many objectionable qualities, but nobody can accuse George W. Bush of being an isolationist. Sachs himself gives the President’s Emergency Plan for AIDS Relief (PEPFAR) high marks. The $3 billion-a-year plan to slow the epidemic and provide life-extending drug treatments to at least 2 million people annually in Africa and the Caribbean is almost exactly what Sachs had recommended. Paul Wolfowitz may yet turn out to be a good appointment to the World Bank. And even the nomination of the odious John Bolton to be ambassador to the United Nations demonstrated a wish to grapple with international organization rather than dismiss it.

So listen to the wisdom of Live 8 — to Bono, Sir Bob, Sir Paul McCartney and, of course, British Prime Minister Tony Blair. It’s not pie-in-the-sky they are advocating. A clear and realistic blueprint is laid out in Sachs’ book. Nor would it be exorbitantly expensive — 0.7 percent of the gross national product of the rich countries. Enthusiasm for African aid programs is much more constructive than are protests against globalization that, were they to be effective, would greatly damage the interests of poor and rich alike.

For all the G-8 meetings and rock concerts, however, keep your eye on the highway engineers. Watch for the concrete ribbons to begin spreading from state to state. That’s when you’ll know that acute African poverty is ending. It will not take another 50 years.

| contents |


Skim past columns here.


Support Economic Principals by subscribing to its bulldog edition—receive the weekly via email a day before it is posted on the Web, and, as well, a quarterly Report to Subscribers.

To reach the proprietor, ask a question about the website or report a problem email warsh@economicprincipals.com.