Im Back!

Hello once again. China was amazing, more on that when I see everyone’s shining faces once again. So I still wanted to weigh in on the Sachs discussion since I missed the class etc. I’ll keep it short since everyone might feel like everything has been hashed out and this isn’t actually contributing to the class discussion on Tuesday, but nevertheless, I still wanted to say a few things.

Primarily, I’d like to try to make the point that I don’t think Easterly and Sachs are contradicting each other too thoroughly. Maybe I’m just interpreting them both as I see fit because I liked them both, but I think their positions on aid and debt could be compatible. Concerning foreign debt: Easterly includes an entire chapter on the failures of debt forgiveness. Nevertheless, he ends his chapter with an explanation of how debt forgiveness can work. “A debt relief program could make sense if it meets two conditions: 1) it is granted where there has been a proven change from an irresponsible government to a government with good policies; 2) it is a once-for-all measure that will never be repeated.” Although the scale of debt relief may differ under the two economists, Sachs’ successful uses of debt forgiveness seem at least to fulfill condition 1. His arguments for forgiving Poland? It used to be a communist satellite. For Bolivia? Debt forgiveness would be a part of large-scale macroeconomic reform. For Russia? Once again a move away from communism. Sachs does not seem to be arguing for reckless forgiveness. Sachs says of debt relief, “It has made sense in the long term for the creditors as well as the debtors, since – when applied wisely – it has allowed countries to get back on their feet.”[1] Obviously, Sachs advocates greater levels of debt forgiveness than Easterly with statements that all HIPCs should get full relief but I hold out hope that such debt relief packages could fulfill at least some of Easterly’s conditions if done wisely.

Concerning Foreign Aid: I was never under the impression that Easterly was against foreign aid. It just seems that he claimed that past aid was misdirected, and as a result ineffectual. Sachs mentions many forms of aid through technology sharing which Easterly would love. His sections on India’s IT boom, Asia’s Green Revolution and Bangladesh leapfrogging to cell-phones are all examples of developing the technology base and creating the environment for matches which Easterly advocates as needed to escape poverty traps.

Trying to keep to my promise, I’ll end on that. By comparing the two, however, I feel that Sachs has successfully implemented multiple solutions at once to provide comprehensive aid which works. This is greatly in line with many of Easterly’s demands to have wise and effective systems for development.

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[1] 101