Saturday, March 13, 2010

Dr. Know

Recipient countries should be invited to prepare plans and budgets.

—Jeffrey Sachs, "Homegrown Aid"
New York Times April 8, 2009
Critics of big-money solutions to complex problems like to make a pariah out of Jeff Sachs. He is an easy target, in part because (unlike Bill Easterly) he generally stays up in the stratosphere, out of reach of his critics.

That would have been me until an afternoon a couple of years ago, when I happened to be out for a walk in San Francisco's Mission District with Kiva founder Matt Flannery. Reflexively, I started Sachs-bashing. I'd barely gotten started when Matt glanced my way and said, "yeah, I've noticed people like to put Jeff Sachs down a lot." Surprised and somewhat deflated by my evident lack of originality, I cut my diatribe short and quickly sought another topic of conversation.

For some time since then, I decided to hold my judgments in check. We do have a convention in academia to avoid ad homimen arguments. Focus on the message, not the messenger.

I was prepared to stick with that line of reasoning, until a few months ago, when I finally took the time to read Sachs' most celebrated popular work, The End of Poverty.

Reading this perplexing epistle to the powerful (core analytic insight: poor countries are like sick patients that require differential diagnosis and treatment??) prompted me to wonder if we, as academics, have not been too easy on Jeffrey Sachs, rather than too hard. What is the nature of the expertise for which he is everywhere lauded? For what actual contributions to understanding or human betterment is he responsible?

To seek answers to these questions is, for me, to take a bumpy ride trip along memory lane, revisiting distinct moments in my career as an economist. I suspect many of my generation have similar recollections . . .

First, I am in graduate school. The Berlin Wall has just fallen. There is this guy from Harvard advocating for something that goes by the name "shock therapy" for countries making the transition away from Communism. Apparently it has been just the trick in Bolivia.

I think to myself, "Who is this guy? What is going to happen to all that state-owned stuff when it's just flipped into the market?" Best case scenario is that it will create a lot of rich criminals who will eventually try to create a proper country ... sort of on the Joe Kennedy Sr. model.
Assessment of contribution: Kept hyperinflation at bay. Otherwise, in Russia, crashed industrial production, plunged life expectancy, and seeded the rise of an autocratic kleptocracy. Not a big win.
Flash forward. I'm a post-doctoral fellow at Harvard's Kennedy School of Government. There is that same guy! Except now he's presenting papers (this one for example) that purport to explain why poor countries are poor. It turns out, they're in the wrong place! If poor countries could be in the places where rich countries are, they'd be rich too. Or something like that.

I think to myself, "Who is this guy? ... Next he'll be telling us that he can figure out someone's IQ looking at the shape of their skull."
Assessment of contribution: In a Department of Geography, might count for credit toward Master's degree . . . if submitted on-time, without too many typos.
Fast forward a few years. I am still at Harvard, now as a lecturer in economics. Sachs has decamped to be the head of the Earth Institute at Columbia University. Only now he has morphed again.. this time into passionate advocate for the poor.

I think to myself, "Who is this guy? If he was being straight with people, his response to anyone who approached him to talk about lifting people out of poverty would be, 'I'm sorry, you've got the wrong guy. I'm a macroeconomist. Therefore, by definition, I can't tell you anything of practical use regarding the day-to-day process of economic development. You need to talk to my former Harvard colleague Amartya Sen, the Nobel Laureate and one of the great social scientists 0f the 20th Century. He will be able to help you. (Zvi Griliches has recently passed away, so I'm afraid you won't be able to talk with him.)'"
Assessment of contribution:

Potemkin villages
< Millennium Villages
< real development
But hearing Sachs speak here in DC a few weeks ago, I finally figured out how this all ties together. Sachs isn't isn't just fond of medical metaphors. He is Dr. Know. Though he has often been wrong, he seems never to be uncertain. He is the guy who believes that "we" have the solution. All "we" need is the money to put the solution into practice. Whether in Russia in 1992, or in Kenya in 2010, the obstacle isn't ignorance or uncertainty, it's willpower. When the determination to drive change is present, change happens.

Checkbooks out, please.

In the end, Matt Flannery turns out to be right. Personalized polemics are pointless. What is at stake in the assessment of the contributions and legacy of Jeffrey Sachs isn't who he is or what he knows, but how he knows.

This meta-discipline—one that encompasses not only what we know, but how we know it—is called epistemology. And, when it comes to development, epistemology is at least as important as economics. Notably, it is on the basis not only of economics, but of epistemology, that the role of entrepreneurs in development can best be appreciated.

If solutions are known, need $$. If solutions are knowable, need evaluations. If solutions are evolving, need entrepreneurs.


  1. That last sentence summarizes development needs so beautifully well. More than the rest of the post, that really sticks with me.

  2. Thanks. Maybe didn't need 895 words to get to that point! But glad if there's a worthwhile take-away.

  3. The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

  4. Mike@PVL might want to add that his whole comment is a quote from Adam@Smith's Theory of Moral Sentiments.