As we continue to delve into the book, Poor Economics, Banerjee and Duflo describe the two different perspectives that economists Jeffery Sachs and William Easterly have in regards to helping other countries end poverty. While examining the ideas from both viewpoints, I find it extremely hard to choose a side that I agree with more, as both have many great ideas. I believe that if the two economists could find a way to combine/compromise their ideas, we could see extraordinary results in these impoverished countries.
Sachs is a very strong advocate for stepping in and trying to make a difference in these poor countries by helping with the many problems with corruption. Sachs believes that in order for people living in poverty to come out of it, they need to be given funds and taught how to use these funds properly to reach a specific long-term goal. However, on the other hand, Easterly seems to be against providing aid to these countries because with all the government corruption that transpires, a large majority of the aid is not being used properly. He also believes outsiders are not aware of the environment of other countries and shouldn’t try to make a difference in government control. Easterly expresses how government issues need to be taken care of internally and a democracy needs to be established. Easterly is also for the idea of self-created institutions that provide hope and motivation for the future. These types of changes would not be possible if outsiders were stepping in. Since it is extremely challenging to simply switch to a democracy and have free market institutions emerge, Easterly explains his ideas of how these countries could make it work. Easterly states “freedom cannot be imposed from outside, otherwise it would not be freedom. These institutions, then, have to be homegrown and emanate from the bottom up. All that can be done is to campaign for the ideas of individual equality and rights. (Banerjee and Duflo, 242). Easterly is strongly for the idea that it is up to the people of these individual countries to help build a democracy and implement proper policies to get them out of poverty.
Although I agree with Easterly with the idea that many of these issues need to be adjusted internally, I find it extremely hard to believe that poor people can find ways to help change the government and implement their own tactics to make a reasonable amount of money. It’s just not that easy in my opinion! If it were that simple, then why hasn’t it been done? From my viewpoint, the answer is because of a lack of knowledge: a common theme that persists through Poor Economics.
I strongly believe that there needs to be some type of help from outsiders if people hope to get out of the poverty trap. However, maybe not the extent at which Sachs believes. Easterly is completely right when he says that giving money to people only goes so far when the government is corrupt and proper policies aren’t in place. I believe that instead of giving money to people to help them get out of the poverty trap, the money should go towards education and teaching people how to develop and prosper. This is where the ideas of both economists mix! If aid goes towards helping people increase their knowledge on how to implement free market institutions and help a democracy emerge, then maybe people will be able to do it themselves. Some sort of help needs to be done for these impoverished people to be able to help themselves. Having the aid focused on increasing knowledge on how to change the government system and make a difference in the economy would be a great start!
Banerjee and Duflo do a great job in addressing the issues of poverty and hunger by drawing awareness to the two goals: 1)end poverty in all forms everywhere and 2)end hunger, achieve food security and improved nutrition and promote sustainable agriculture. The authors have suggested many ways into helping attain these two goals, such as randomized trials. In Poor economics, the authors explain how Americans wouldn’t be as efficient in getting shots, medicine and staying healthy if we didn’t have incentives. Randomized trials with incentives are one way to help find a solution to people being more motivated to improve their health. Preventing sickness instead of curing sickness is a main point that Banerjee and Duflo discuss and randomized trials help attain that. It is important that attention is being brought to these issues and people must consistently look for ways to help.
Banerjee, A. & Duflo, E. (2011). Poor Economics.
Tollefson, Jeff. “Can Randomized Trials Prevent Global Poverty.” Nature.com. N.p., 12 Aug. 2015. Web. 2 Feb. 2017.