REVIEWED

THE IDEALIST:
JEFFREY SACHS AND THE
QUEST TO END POVERTY

Dreams,
disappointment
...and defeat

Nina Munk Doubleday, 2013

The simplicity of Jeffrey Sachs
formula for ending poverty made
it ideal for a successful advocacy
campaign. All the problems
of poverty had technological
fixes, the Columbia University
economist argued: bed nets to
prevent malaria; wells to provide
clean water; hospitals to treat
curable diseases; fertiliser to
raise yields of food crops. Ending
poverty, therefore, was just a
matter of raising enough money
to pay for the technical solutions.
Sachs would demonstrate his
ideas by deploying these fixes
in a dozen or so Millennium
Villages in Africa. Success would
build on success to scale Sachs
experiment up throughout
the continent.
The Idealist, Nina Munks
brilliant book on Sachs, chronicles
how this dream fell short of
reality. Munk, a contributing
editor at Vanity Fair, follows
Sachs around as he tries to make
all this happen. But she also goes
out on her own to the
Millennium Villages. She visits
two villages repeatedly: Dertu,
in the ethnic Somali region of
Kenya, and the more centrally
located settlement of Ruhiira,
Uganda. Munk thus makes us
see the villagers as real people,
not stereotypes.
The technical fixes turn out
to be anything but simple. The
saga of Dertus water wells is
illustrative. Soon the local man
put in charge of the wells had
to order a crucial part lacking
for the water wells generator. It
took four months to arrive, and
then nobody knew how to instal
it. Eventually a distant mechanic
arrived at great expense. A couple
of years later, Munk found the
same problems.
A little over a year on, the
Millennium Villages blog
celebrated Dertus wells as the
most reliable water supply within

the region. But then the wells

ran dry altogether due to
a drought.
Such examples multiply in
Munks book, showing that
technological answers to poverty
are not the silver bullet Sachs
maintained. Technology requires
implementation by real people
subject to widely varying incentives
and constraints in complex social
and political systems.
Munk shows successes as
well as failures. Sachs project
spent $1.2 million on health
in the other village, Ruhiira,
including hiring two doctors
and 13 midwives. Many fewer
mothers in Ruhiira are now left to
their own resources to give birth,
and the prevalence of malaria has
fallen drastically. But the difficulty
achieving the successes and
the frequency of the
failures contradicted Sachs
original promises.

46

Perhaps most revealing about

the big aid debate is that this
wave of criticism of Sachs arose
from accusations that there were
no proper evaluations. The critics
pointed out that any positive
trends in the Millennium Villages
would have to be compared with
the positive Africa-wide trends in
health, access to clean water and
overall development. Sachs had
not set up the project so
that this comparison could be
done reliably.
Sachs actual objective for the
Millennium Villages to show
that aid could achieve the end of
poverty does not even merit a
mention by Sachs critics today.
This idea is regarded as not worth
refuting. The big aid debate is
really over.
I should say a word about
my own history with Sachs. In
2005, when I wrote a negative
review of Sachs book The End
of Poverty, I became identified
for years afterwards (with rising
unwillingness) as the antithesis
to Sachs thesis, a never-ending
debate aid can end poverty!
No it cant!
Eight and a half years later, I
take no pleasure in the defeat of
Sachs big ideas, especially as this
failure involves the sufferings of
the people affected. And Sachs
does deserve some recognition
as a gifted and hard-working
advocate for compassion
for those still left out of the
considerable progress that has
happened in development. But
the idea that aid could achieve
rapid development and the end
of poverty was wrong. It is time
to debate what really does matter
in development
William Easterly
Professor of Economics,
Co-director of Development
Research Institute,
New York University
william.easterly@nyu.edu

REVISITED

A
pioneers
prophetic
words

EQUALITY, THE THIRD

WORLD, AND
ECONOMIC DELUSION
PETER BAUER HARVARD UNIVERSITY PRESS, 1981

Peter Bauer was a modest,

courageous man. For many years,
this brilliant Jewish refugee
from Budapest was seen as an
eccentric maverick by fellow
economists. Yet over time his
criticisms of state directed
aid to the Third World was
accepted by a growing number
of economists, both in Britain
and overseas. Furthermore, his
views eventually influenced the
major multinational aid bodies
including the World Bank whose
Berg Report, published in 1981,
clearly owed a major debt to
Bauer in its criticism of the
interventionist policies adopted
by African governments.
This volume collects together
a number of Lord Bauers essays
on economics and foreign aid.
They are well worth reading.
Bauer was an astute observer
and undertook painstaking
research into the operation of
commodity markets. Indeed, he
was a pioneer in collecting and
analysing data, exemplified by
his classic study on West African
Trade published in 1954.
Bauer is scathing about
the impact of ill-conceived
government controls imposed
on agricultural commodities in
West Africa in the Second World
War and the post-war period.
In his essay reviewing British
Colonial Africa, reproduced in
this collection, Bauer points out
that a cluster of state export
monopolies known as marketing
boards became the most
important single instrument of
state economic control in British
Africa. He highlights the fact
that from their inception the
boards withheld large sums from
the producer by paying them
far less than market prices. They
also exercised close control over
processors and traders. Neither
during nor after colonial rule
did the policies of the marketing

boards accord in any way with

their ostensible objectives.
The people who suffered were
small-scale farmers while, as
Bauer points out, the huge sums
that accrued to the government
and its various tentacles of power
reinforced the effects of other
state controls, especially of import
licensing, in promoting large scale
corruption. If the money was not
pocketed by politicians, it tended
to be channelled into prestige
projects and, of course, official
Mercedes limousines. Bauer
laments, a large proportion was
spent on projects and activities
that were uneconomic at best, or
total failures, or instruments for
personal enrichment and political
patronage.
Bauer sided with the ordinary
farmer and women selling their
wares in street markets. His books
demonstrate a profound respect
for the citizens of the Third World
and he clearly bristled at the
patronising tone adopted
by many mainstream
development economists.
Bauer argues that, In effect,
state aid is a form of taxing the
poor in the West to enrich the

47

new elites in former colonies.

This debate is just as topical
today as when Bauer originally
penned those words. Every week
there appears to be a media
story about politicians and
commentators questioning the
merits of maintaining Britains
substantial development aid
programme.
Bauer argues that foreign aid
is perhaps the least questioned
form of state spending in
the West, even though it is
taxpayers money which goes
to foreign governments, and
these are political matters. Since
he first wrote those words his
own writings have influenced
an increased scepticism on
the efficacy of bilateral and
multilateral official aid.
Increasingly, one hears trenchant
voices arguing that it is more
sensible to enable developing
countries to export their goods
and services to the protected
markets of the EU and USA. One
of the more notable champions
of such a position is none other
than Sir Bob Geldof, who now
chairs 8 Miles LLP, a private equity
firm investing substantial sums in
businesses throughout Africa.
Bauers long term influence
is likely to be strongest on the
growing number of successful
entrepreneurs and political
leaders emerging out of Africa.
Dambisa Moyo, the Zambian
international economist who
sits on several corporate boards
including Barclays plc, is a good
example. Indeed, she dedicated
her best seller Dead Aid to Lord
Bauer. What finer compliment
could one wish for? Bauer, who
died aged 86 in 2002, was a
charming man who would have
appreciated her dedication
Keith Boyfield
IEA Fellow
keithboyfield@gmail.com