PHA-Exchange> The Elusive Quest for Growth: Economi

[Claudio Schuftan]

>      Foreign Affairs, September/October 2001.
>      Richard N. Cooper

The Elusive Quest for Growth: Economists' Adventures and Misadventures
in the Tropics.
By William Easterly,  Cambridge: MIT Press, 2001

Book Review can be found at:
http://www.foreignaffairs.org/Search/document.asp?i=20010901FABOOK5590.XML

 ".......A highly readable and iconoclastic treatment of the determinants of
economic growth -- a topic that interests the author (an official at the
World Bank) primarily because growth alleviates poverty. The book draws
heavily on today's fashionable cross-country statistical research, much of
it done
or sponsored by the World Bank. Yet it offers a nontechnical review of how
views on growth have affected the policies of foreign-aid agencies and
international financial institutions.
Easterly finds much of the conventional wisdom to be wrong, or at least
not  upported by statistical evidence.
Presumptions that foreign aid increases investment, that high investment
ratios lead to higher growth, or that education, population control, and
debt relief will stimulate growth all lack empirical support, he charges. He
then attempts to explain why growth has been so disparate across countries,
and what might be done about these disparities.
Although much depends on luck, the key lesson for economic performance
is that people respond to the incentives they face. If these incentives are
conducive to growth-inducing behavior, growth will occur, bad luck aside.
But for a variety of reasons, most poor countries have badly misdirected
incentives --sometimes with the implicit support of aid agencies....."
>
More information at:
 http://www.worldbank.org/research/growth/elusive%20quest%20for%20growth.htm