Clinical economics for the global emergency room

The End of Poverty: Economic Possibilities for Our Time
By Jeffrey D. Sachs
The Penguin Press
New York

In an early chapter of his bold and thoroughly engaging new book, Jeffrey Sachs says he has learned much about development economics from watching his wife practice medicine.

“I have watched in she approaches a medical emergency or complicated case with speed, efficacy, and amazing results,” writes Dr. Sachs in The End of Poverty: Economic Possibilities for Our Time.

In contrast, he says, “today's development economics is like eighteenth-century medicine, when doctors used leeches to draw blood from their patients, often killing them in the process.”

“In the past quarter century, when impoverished countries have pleaded with the rich world for help, they have been sent to the world's money doctor, the IMF. The main IMF prescription has been budgetary belt tightening for patients much too poor to own belts.”

What is needed instead, he writes, is a new method for development economics, which he calls “clinical economics.”

“Development economics...can improve dramatically if development economists take on some of the key lessons of modern medicine, both in the development of the underlying science and in the systematization of clinical practice,” Dr. Sachs writes.

With that analogy, he begins to lay out a broad plan — which was devised in part with the help of some 260 other economists and development experts under the aegis of the UN Millennium Project — that he believes could end extreme poverty in 20 years.

Such an idea — that it might be possible to end the misery suffered by the world's extreme poor — is dramatic, to say the least.

The history of international development is littered with the failure of grand ideas, most notably the huge infrastructure projects of the 1960s and 1970s, which has caused many nations to go slow in the provision of so-called Official Development Assistance (ODA). More recently, some say too much development assistance is diverted into the hands of corrupt governments.

There is also considerable debate about the direction and philosophy of development. Some say trade and private enterprise are the best engines for pulling the poor out of poverty; others say such an outlook only boosts the fortunes of multinational corporations to the detriment of the world's poor.

Dr. Sachs, who is widely considered one of the best minds in the field, carefully marshals his arguments in favor of his new, clinical approach — and the financial implications it carries. He builds his case in three parts.

First, as might be expected from a former Harvard professor, he offers a primer on economics and his history of development. Second, he offers up his resumé, so to speak, recounting his experiences as an international advisor to the economic reform efforts (some successful, some not) in Bolivia, Poland, Russia, China, India, and select countries in Africa.

Finally, he unfolds the dramatic plan, known as the Millennium Project, that he and a team of other economists and experts have devised at the request of UN Secretary General Kofi Annan. [See also "The Challenge of Extreme Poverty"]

For anyone interested in development or international affairs, the first two parts of the book alone are worth the price of purchase. His explanations of how economic development works and why some countries over the last 200 years have pulled themselves almost entirely out of poverty while others — notably in Africa and parts of Asia — have lagged behind are clear and well-argued.

“[T]he single most important reason why prosperity spread, and why it continues to spread, is the transmission of technologies and the ideas underlying them,” writes Dr. Sachs. “Even more important than having specific resources in the ground, such as coal, was the ability to use modern, science-based ideas to organize production. The beauty of ideas is that they can be used over and over again, without ever being depleted... This is why we can envision a world in which everybody achieves prosperity.”

The middle of the book, outlining his experiences in promoting economic reform, further sets the stage for his bold claim that extreme poverty can be ended. His experiences in India and China, especially, give him great hope that extreme poverty can be eradicated. Both countries have vast populations of extreme poor but are now benefiting, he believes, from a trade-based, technologically driven rate of growth.

“Who would have guessed 25 years ago that impoverished India would burst upon the world economy in the 1990s through high-tech information services? Nobody.”

The final third of the book offers a clear outline and analysis of the grand plan devised by the Millennium Project, which operated under his direction. It calls for a scaling up of all that has been learned about international development in recent years and applying it, under the management of the United Nations and its various agencies.

It also calls for the scaling up of international donations to poor countries, to the tune of about $150 billion a year for the next 20 years. “Although introductory economics textbooks preach individualism and decentralized markets, our safety and prosperity depend at least as much on collective decisions to fight disease, promote good science and widespread education, provide critical infrastructure, and act in unison to help the poorest of the poor,” he writes. “Collective action, through effective government provision of health, education, infrastructure, as well as foreign assistance when needed, underpins economic success.”

The problem is that rich nations have resisted giving that level of assistance. On average, ODA amounts to about .2 percent of gross national product — rather than the .5 percent called for by the Project. But, writes Dr. Sachs, “The effort required of the rich is indeed so slight that to do less is to announce brazenly to a large part of the world, ‘You count for nothing.'”

Dr. Sachs is quite sharply critical of specific governments at times, accusing some countries of a “disconnect between foreign policy rhetoric and foreign policy follow-through” when they promise international aid but fail to deliver it. He is also critical of military intervention, offering up a table linking such interventions to “failed states.”

From a Bahá'í perspective, Sachs' book has much to recommend it. While Bahá'ís would not necessarily agree with every detail, and would distance themselves from views that veer towards political partisanship, they have long felt that the problem of global poverty should be given a high moral imperative. They also believe that only through a concerted international effort, undertaken in a spirit of unity and sacrifice, can poverty be eradicated.

Much of Dr. Sachs' analysis, too, will resonate with Bahá'í thinking. To give but one example: Dr. Sachs' comparison of development to the human body in its complexity.

One cannot help but recall Bahá'u'lláh's words: “Regard the world as the human body which, though at its creation whole and perfect, hath been afflicted, through various causes, with grave disorders and maladies. Not for one day did it gain ease, nay its sickness waxed more severe, as it fell under the treatment of ignorant physicians, who gave full rein to their personal desires, and have erred grievously.”

For Bahá'ís, as for Dr. Sachs, the answer to such challenges is to be found in unified action on a global scale. “The well-being of mankind, its peace and security, are unattainable unless and until its unity is firmly established,” wrote Bahá'u'lláh.

Dr. Sachs' book should be required reading for anyone concerned about international development, global poverty, and even peace and security. The high quality of the economic and political analysis he offers demands a serious discussion, and everyone must ask him- or herself whether we can at long last bring about “the end of poverty.”