Since the end of World War II, economists have tried to figure out how poor countries in the tropics could attain standards of living approaching those of countries in Europe and North America. Attempted remedies have included providing foreign aid, investing in machines, fostering education, controlling population growth, and making aid loans as well as forgiving those loans on condition of reforms. None of these solutions has delivered as promised. The problem is not the failure of economics, William Easterly argues, but the failure to apply economic principles to practical policy work. In this text, Easterly shows how these solutions all violate the basic principle of economics, that people - private individuals and businesses, government officials, even aid donors - respond to incentives. Easterly first discusses the importance of growth. He then analyzes the development solutions that have failed. Finally, he suggests alternative approaches to the problem.
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"This is a brilliant, original work. It is simply the best book I know on economic development. Easterly writes with clarity, honesty, and humor. And he is courageous in his analysis of what went wrong with the development policies followed by the World Bank." - Sergio Rebelo, Tokai Bank Distinguished Professor of International Finance, Kellogg Graduate School of Management, Northwestern University"
William Easterly is Senior Advisor, Development Research Group, the World Bank
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