African Economies: The Tensions Between Hope and Inertia

In a famous 1984 essay in the American Economic Review, the Nobel laureate Sir Arthur Lewis decried the dearth of new ideas in development. He attributed this phenomenon to the long gestation period that often ensues following a major scientific breakthrough or an earth-shattering event such as the Great Depression, and lamented the fact that economic thinking since the 1960s lacked the analytical punch and purpose previously associated with postwar development ideas, particularly Keynesianism. Lewis's indictment still rings true today despite the proliferation of books on poverty alleviation, trade liberalization, and the consequences of new diseases, such as HIV/AIDS, for economic development. My reading of these three books proceeds from similar analytic skepticism. All are written by famous development thinkers and practitioners—Sachs, development economics' equivalent of a rabble-rouser in the cause of poverty alleviation and the plight of the poor in Africa; Stiglitz, a World Bank insider-turned-outsider, who embarrasses his colleagues through a stinging critique of the Washington Consensus; and Lewis, the U.N. Secretary General's Special Envoy on HIV/AIDS and longtime crusader for a rational HIV/AIDS policy in Africa.

Classical debates on development—over the enhancement of economic growth, or the promotion of equity, or the expansion of political participation—seek to capture the broad array of institutions that facilitate or impede these processes. These three books make a solid contribution to contemporary understanding of development impediments without pretending to make any dramatic breakthroughs. Although they seek answers to the broader dilemma about obstacles to development, their major contribution is to deepen debates on the recurring development challenges: trade, poverty, and disease. The three challenges have their opposites: prosperity, health, and security—issues that most of Africa continually yearns to solve.

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Sachs picks on a narrow question that is yet salient: Why, in the context of scientific discoveries and technological change, do some countries remain perpetually poor? I salute Sachs for reminding us that the greatest English miracle, the Industrial Revolution, is barely three hundred years old, a very short period in developmental terms. The significance of this revelation is that if modernity itself is new, we cannot afford to give up on the possibility of poverty reduction projects that now form part of the larger development enterprise. It is a tribute to Sachs's sharp policy angle that he insists that there are too many islands of success that need to be nurtured out there—in villages in Africa, urban centers in India, and the barrios of Latin America. The key developmental challenge (which Arthur Lewis would note is not news) is the political context in which economic incentives are mobilized. As the theorists lumped under the rubric of new institutionalism contend, institutions enable and disable rules for economic development, reduce uncertainties, and foster the development of markets. The question for Sachs is why, if this is true, Africa remains mired in poverty.

Sachs proposes radical prescriptions that embarrass academics and policymakers who contend that the obstacles to reducing poverty are more cultural than structural. His suggestion of a Marshall Plan to jump-start African economies is treated with skepticism in the champagne-filled rooms of the Davos annual conclave and G-8 meetings. Yet Sachs's argument is as simple as it is elegant: the problem is not the poor, but the absolute poor, those living on less than a dollar a day, and the situation is not that desperate: they can be helped out of this condition, but only with ambitious policy programs that have succeeded elsewhere. This policy plea is Sachs's biggest contribution to the development debates that are...