Schlock Therapy
BATE, ROGER
Schlock Therapy This week's plan to end world poverty. BY ROGER BATE I came to this book with mixed feelings. Having met Jeffrey Sachs briefly in 2001, I was dazzled by his rhetorical skills, and...
...He is right about the tragedy of poverty: Someone dying every three seconds from extreme poverty is a story that should be told with passion, and solutions should be urgently sought...
...His approach has become known as "shock therapy"—a phrase that now dogs him, although he didn't seem to mind it when it was used alongside terms like the "Sachs plan" in the early 1990s...
...Fair enough...
...Lack of good governance keeps citizens poor, and guaranteeing a ruler a life ticket on a gravy train is enough to corrupt a saint...
...should coordinate massive aid through the various large agencies (World Bank, IMF, WHO, etc...
...Take malaria: Eradicated from many countries when DDT was used, it returned significantly to some of them when DDT use was stopped...
...Roger Bate is a resident fellow at the American Enterprise Institute...
...About a decade ago, Sachs's attention switched from macroeconomic and currency reforms to the developing world, and especially the problems of Africa...
...in areas of extremely low capacity...
...It seems bankers, like the rest of us, prefer to stay within the crowd, even if the crowd is wrong...
...And this is the part of Sachs's book I find most disappointing: He ignores the history of failed aid, and the perversion of human action it causes...
...I am with Sachs on the hypocrisy of world leaders who sign up to targets and timetables without real thought as to whether they are deliverable...
...Unfortunately his approach to malaria control fails for the same reason...
...So, WHO behaves just like the IMF...
...He published influential papers on the costs of malaria and AIDS to Africa, and documented how all but a handful of Northern European countries were not hitting their U.N...
...He predicts that increasing aid spending by tens of billions of dollars each year until 2025 will spring the poverty trap for good and all...
...And when it is wrong—as it is much of the time—it is hugely damaging...
...Nor has any country become wealthy from handouts from another—individuals and Swiss bank accounts notwithstanding...
...He says that the complex system of the body requires an understanding of complexity, a diagnosis, and targeted treatment, and so it is with economics...
...It will be more so if Sachs gets his way and increases its influence tenfold...
...Never mind the gravy train operators taking a cut...
...It makes me quite sad that I know better...
...Critically, only in the countries that had reformed or improved economically, such as Singapore, did it stay eradicated...
...Given the choice, developing countries prefer to spray insecticides to control mosquitoes...
...Sachs correctly chastises the IMF and World Bank for their dogmatic demands for structural reforms, such as cutting budget deficits, without establishing whether they improve sustainable growth...
...The U.N...
...targets are missed because their purpose is to maintain jobs, make the bureaucrats feel noble, and to spoon-feed headlines to the media (who we all know are too lazy to properly check back on the stream of broken promises...
...If Sachs just stuck to cheerleading he might be occasionally annoying, but still useful to raise awareness...
...Unfortunately, he will exact more influence over the distribution of aid than most cheerleaders have over team strategy...
...Sachs is a great fundraiser, and I have no doubt more aid will be forthcoming...
...Interestingly, Sachs says he has drawn his economic approach from medicine—his wife is a physician— but the analogy is false...
...Sachs's supreme self-belief—okay, breathtaking but enjoyable arrogance— almost seduced me into believing that ending poverty is not only possible, but straightforward...
...He dislikes their hegemonic and homogenous advice since, when it is wrong, it harms millions...
...targets of 0.7 percent of GDP in foreign aid...
...It would be a relief to know that the failure of his proposed reforms for Russia and parts of Africa was caused by a lack of faith—that those countries simply didn't follow his advice...
...Sachs has become the intellectual cheerleader to the world's poor— articulate, passionate, persuasive, and wrong...
...It's Sachs's loss of analysis, when it comes to this aspect of human nature, that is most worrying...
...Western donors, influenced by environmentalists, want to force them to use bed nets, even when they don't work or are used for fishing...
...Despite the cynicism, the U.N...
...His plan is that the U.N...
...In the real world, it's the alternative approach of tailored aid to specific projects and marginal reform of institutions that is promoted by Sachs's nemesis, Bill Easterly, author of the Elusive Quest for Growth and a fellow New York-based economics professor, which has proved most successful, especially among the Asian tigers...
...Sachs has the passion, but his solutions seem to come down to a recurrent theme in his work: spending vast amounts of Western money to attempt to instantly instill economic reforms in poor or transitional economies...
...But I'm baffled that he has faith in targets...
...Having met Jeffrey Sachs briefly in 2001, I was dazzled by his rhetorical skills, and he is obviously an incredibly bright and driven man, so I really wanted to understand why he is prescribing a kind of Great Leap Forward, a huge boon for the aid industry, but so destined for failure...
...But unless aid is well targeted, or free-market reforms are enacted, any health benefit will be short-lived...
...can be a force for good, but that ain't the way...
...No country can keep another one poor (unless by violence...
...I had no idea that Sachs almost singlehandedly solved the macroeconomic problems of Bolivia and Poland, so perhaps his vision is the true one...
...we're already seeing it with AIDS...
...But with his intellect and knowledge of the system, he should surely realize what all insiders know: that U.N...
...to complex problems (nutrient-poor soils, malaria, high water salinity, etc...
...I hope, however, he never gets hold of the playbook...
...Early on, Sachs says: "The key is not to predict what will happen, but to help shape the future...
...The idea that a poverty trap exists at the international level is just plain silly...
...delivering complex solutions (nitrogen-fixing plants, bed nets, water recycling, etc...
...agencies that he trusts to control health spending in poor countries actually do what is least offensive to shareholders and advisers rather than what is best for patients...
...Of course, I was impressed with the book...
...But where he is right about treating malaria in patients, his diagnosis of how to control malaria in Africa is bound to fail, because human beings respond to incentives and make choices, and red blood cells do not...
...The worst thing about long-term aid is that it encourages the brightest minds in a country to milk the system rather than do something productive...
Vol. 10 • June 2005 • No. 41
