Poor no more: strategies of global development

The End of Poverty: Economic Possibilities for Our Time.

By Jeffrey D. Sachs. Penguin, 397 pp., $27.95.

CRISIS BOOKS usually follow a predictable pattern: first a searing depiction of the problem at hand, then some broad and sweeping assessments of how great changes in attitude might begin to address the issue, and then some piddling and timid policy proposals that clearly won't begin to meet the challenge. The authors are then charged with failing to provide solutions, and they in turn take refuge in the idea that at least they have diagnosed the problem.

Jeffrey Sachs does not fall into this rut, and as a result he has written a book of enormous rhetorical power. He convincingly presents world poverty as a manageable problem; indeed, he offers a plausible and very nearly painless plan for dealing with it, and all with an unruffled self-confidence that can't help sweeping a reader up in his optimism. That optimism, as we shall see, may be somewhat misplaced; still, there is no denying that it is a psychological relief to encounter such a hopeful, simple prescription.

Indeed, prescription is the right word, for Sachs styles himself an aspiring "clinical economist" with the goal of diagnosing the causes of ailing economies just as his wife, a pediatrician, diagnoses illnesses of ailing infants. The book is presented in standard medical form, with an abstract of the problem at the outset, and then a series of case histories of patients (Bolivia, Poland, Russia and so on) that he and his team have carved up with varying degrees of success. The disease he concentrates on eliminating is "extreme poverty," whose sufferers he estimates at about a billion people concentrated in Africa and South Asia. These are our brothers and sisters subsisting on the equivalent of a dollar a day or less. Sachs's initial goal, "the very hardest part of economic development," is to get this group a "first foothold on the ladder" of the modern economy.

"The end of poverty, in this sense, is not only the end of extreme suffering but also the beginning of economic progress and of the hope and security that accompany economic development." Once these people have reached "moderate poverty"--average income between one and two dollars a day--then the worst is over; as long as the rich countries do not "advertently or inadvertently set snares along the lower rungs" with protectionist trade barriers and the like, these people should make steady progress, "even if it is uneven and sometimes painfully slow." In any event, he points out (just like a pediatrician with a height-and-weight chart), we have a set of targets already in hand: the UN, with the rare approval of the United States, agreed in 2002 to the Millennium Development Goals, which call for the elimination of extreme poverty by 2025. It is to this task that Sachs sets himself not only in this book but also in his work as a special adviser to Kofi Annan and as director of Columbia University's Earth Institute.

Sachs offers a short overview of development economics, explaining why some countries have grown rich in the past few centuries while others have barely grown at all. It was technological change, above all the discovery of how to use the energy concentrated in coal and oil, that led to the Industrial Revolution and subsequent boom. "The steam engine unlocked the mass production of goods and services on a scale beyond the wildest dreams of the preindustrial era." Some nations were better poised than others to take advantage of innovation--England in particular, because it had a relatively open society with more scope for entrepreneurship; strong institutions of political liberty; a commitment to the scientific method exemplified by Newton; lots of seaports and colonies; a relative isolation that reduced the risk of invasion; and lots and lots of coal.

It is just such advantages, Sachs argues, that many of the world's poorest countries do not enjoy. Many are hindered because they are mountainous or landlocked so their transportation costs are high; their corrupt or weak governments can't maintain necessary infrastructure; and innovators lack patent protection and the capital necessary to bring their inventions to market. And so nations languish, even decline--vulnerable in their poverty to scourges like AIDS that further hinder economic prospects.

IT IS NOT ENOUGH, Sachs argues, to preach "free markets" as the solution to such woes. Free markets are necessary but not sufficient. These countries need help in achieving what he considers the crucial first step: raising grain yields enough that farmers can move beyond subsistence to providing cheap food to support a growing urban economy, which is the real wellspring of prosperity. He offers Bangladesh as a case in point. The T-shirt factories that American activists have decried as sweatshops may be grim, he says, but they are preferable to the poor rural villages their employees have left behind. "For these young women, these factories offer not only opportunities for personal freedom, but also the first rung on the ladder of rising skills and income for themselves and, within a few years, for their children."

For Sachs, Bangladeshi workers are akin to the immigrants who once worked on New York's Lower East Side, "where their migration to toil in garment factories was a step on the path to a future of urban affluence in succeeding generations." Their fertility rate will drop as their condition and education improve; all in all, Bangladesh has a chance "in the next few years to put itself on a secure path of long-term economic growth" such as that now enjoyed by China and India.

The same transition could happen, Sachs insists, in the continent-sized poverty trap we know as Africa--if only the rich world would help with a few essential ingredients. He identifies the "Big Five" development interventions that would spell the difference between a country characterized mostly by hunger, disease and death, and one characterized by health and economic development.

The Big Five are: agricultural inputs such as more fertilizer and better seed; investments in basic health to prevent malaria and treat AIDS; investments in education, such as providing meals at school to improve health and attendance; power, transport and communications services, including electricity for lights and computers at schools and for milling grain, as well as trucks and roads to provide transport to market; and safe drinking water and sanitation to save women the endless toil of fetching water. His calculations--doubtless spuriously specific, but still indicative--reveal that such basic needs could be met by transferring about 31 cents a day per extremely poor person from the rich nations--a total of $124 billion, or 0.6 percent of the total income of the rich world. That's not 6 percent--that's six-tenths of 1 percent.

This is obviously a trivial amount to us. As Sachs points out, "if the United States were on track to reach a $40,000 disposable annual income by, say, January 1, 2010, it would instead reach the same income on May 1, 2010, one-third of a year later. This four-month lag in attaining a higher level of consumption would mean that a billion people would be given an economic future of hope, health and improvement." Indeed you could pay for the U.S. share simply by repealing the Bush tax cuts for people making over $500,000 a year.

IN THE FACE of such compelling figures, the last few chapters of the book, which are devoted to proving in earnest but painful detail why we should make these investments, are almost superfluous. Certainly for Christians anyhow: I was hungry and you gave me 0.6 percent of your income. We should be very grateful for getting off so lightly.

Sachs's plan should cheer not just soft-hearted liberals, but also every conservative with a conscience and a calculator: if this is the price for bringing the entire world into the ambit of the modern economic system, what argument could there be against it? None, really--only a churl could read this book and say no.

Still, that endorsement doesn't end the discussion. Yes, we should try much of what Sachs envisions; there is no doubt we must do something about extreme poverty, and his plan qualifies as something. But there are reasons to suspect that it won't be as straightforward as he suggests--and that some parts of his preferred path may even prove to be counterproductive.