Tag Archives for " foreign aid "
@@@@@ (5 out of 5)
Misconceptions abound in the public perception of corruption in Africa. Tom Burgis’ incisive new analysis of corruption on the continent, The Looting Machine, dispels these dangerous myths.
For starters, corruption is mistakenly believed to reign supreme in every country on the African continent. (There are 48 nations in Sub-Saharan Africa, with a combined population of more than 800 million.) Of course, it’s true that some African countries rank very low on Transparency International’s “Corruption Perceptions Index” (CPI) — after all, Somalia merits the very lowest score, with Sudan and South Sudan not far above it — but only Eritrea and Guinea-Bissau rank at all close to them. In between them are many other countries: Middle Eastern, Central Asian, Caribbean, South Asian. And three Sub-Saharan African nations rank in the top third of the 175 countries in the CPI: Lesotho, Namibia, and Rwanda, with Ghana close behind. Ghana scores better than Greece, Italy, and several other European nations.
Second, corruption in Africa is viewed as intractable. It’s widely believed that nothing can be done about it. Nonsense! One of the largest and most potent sources of the cash that fuels corruption is foreign aid. Institutions like the World Bank, USAID, and other national and international agencies direct most, if not all, their support to governments. This, despite the obvious evidence on the ground that a huge proportion of this aid goes straight into the pockets of the ruling elites. If foreign aid were doled out more selectively to community-based organizations, local agencies, and NGOs with grassroots operations, the picture might be very different. As things stand, only a trickle of foreign aid gets to the people who need it most: the poor.
Lastly, and most significantly, too many observers characterize African corruption as a uniquely African phenomenon that grows out of ethnic rivalries and the failure of European colonists to establish stable native governments. Those factors, while present, are only part of the story. Equally, if not more, consequential is the role of foreign investment — principally from China, the US, and Western Europe — in exploiting the continent’s abundant resources, often paying through the nose for the privilege. Corruption is a two-way street: briber and bribee need each other. And those Western investors include some of the world’s biggest US- and European-based multinational corporations — most prominently, Big Oil and the major mining companies. Chinese companies are even worse because they’re not constrained by legal restrictions at home. Prominent foreign aid cheerleaders like Jeffrey Sachs of Columbia University do the African people no favors by advocating huge increases in official aid, rationalizing that some of it will actually do good. Just ask the first ten Africans you meet on the street in Lagos or Nairobi or Luanda. Unless you happen to run into a member of the privileged elite, you’ll get an earful about Western-enabled corruption.
The Looting Machine spotlights this two-way street, with an emphasis on commerce. The role of foreign aid receives little attention. The principal source of corruption in Africa, Burgis contends again and again, is its wealth of natural resources: oil, gas, gold, diamonds, copper, iron, and many other materials essential to the rich nations’ consumer economies. Citing an analysis by McKinsey, he reports that “69 percent of people in extreme poverty live in countries where oil, gas, and minerals play a dominant role in the economy and that average incomes in those countries are overwhelmingly below the global average.” This is one of the most tragic consequences of what economists refer to as the “resource curse.” Burgis asserts that “An economy based on a central pot of resource revenue is a recipe for ‘big man’ politics.”
It’s no accident that the resource curse finds its fullest expression in Africa: the continent accounts for 13 percent of the world’s population and just 2 percent of its cumulative gross domestic product, but it is the repository of 15 percent of the planet’s crude oil reserves, 40 percent of its gold, and 80 percent of its platinum — and that is probably an underestimate.”
The scope of the corruption this cornucopia of resources makes possible is difficult to comprehend. For example, “When the International Monetary Fund examined Angola’s national accounts in 2011, it found that between 2007 and 2010 $32 billion had gone missing.” That’s billion with a “B.” And this, in a country of just 21 million people — a population roughly equivalent to that of Sao Paulo, Seoul, or Mumbai.
If you want to gain perspective on poverty, war, and corruption in Africa, read this book.
The emphasis in The Looting Machine is on those countries Burgis knows well: Angola, Nigeria, Congo, with less intensive reporting from several other nations.
Tom Burgis has worked for the Financial Times in Africa since 2006, covering business, politics, corruption, and conflict. On his LinkedIn page, he describes his reporting as encompassing “Oil, mining, terrorism, the arms trade, corporate misconduct, intelligence, money-laundering, the underbelly of the global economy, forgotten warzones, tales of the human soul.” He is currently the Investigations Correspondent for the Financial Times, no longer limited to Africa.
Caveat emptor: I don’t pretend that the 14 books in this list are THE BEST nonfiction books published during the five years since I began reviewing books in this blog. However, they’re the best ones I read and reviewed, every one of them a source of enlightenment that deepened my understanding of the world we live in. They’re arranged in alphabetical order by the authors’ last names.
Solidly based on research, this analysis of the War on Drugs and its doleful consequences would be enough to warrant reading the book. But the author’s inquiry runs deeper, into the origin and structure of institutionalized racism in America’s criminal justice system.
Forty years ago, millions died in Bangladesh’s war of independence from West Pakistan. The American government — and both Richard Nixon and Henry Kissinger were personally complicit. Here is new fodder for the charges of crimes against humanity that have repeatedly surfaced around research into the actions of the Nixon Administration.
An enthralling and deeply disturbing book that reads like a novel, this is a three-year study of life in a small Indian slum nestled between the new Mumbai International Airport and the five-star hotels clustered nearby. A quest to understand poverty and the ways people find to transcend it.
Billions still languish in poverty because the “experts” in charge of development have completely overlooked the insight and resourcefulness the poor themselves can bring to the table. Today, many experts still urge that foreign aid be channeled through national governments, despite decades of failed anti-poverty programs.
The Power of Unreasonable People ranks with David Bornstein’s seminal work, How to Change the World, as a point of entry into the fascinating, and increasingly important, realm of social entrepreneurship. Written by two of the field’s leading voices, this excellent book covers the landscape, describing examples from virtually every area of interest in development, from healthcare to education to poverty eradication. In fact, the book is most rewarding in its presentation of vignettes of individual social enterprises, including interviews with many of their principals.
Two extraordinary men — William S. Knudsen and Henry Kaiser — are the stars of this story, business impresarios who marshaled the stupendous numbers of men and women and the unprecedented mountains of raw materials that supplied the U.S. and its Allies with the weapons of war. The massive American rearmament they captained must rank with the breaking of the German Enigma Code and the atomic bomb as a factor in the Allied victory in World War II.
Churchill, Roosevelt, Marshall, Eisenhower, Nimitz, and MacArthur played crucial roles in winning World War II, but so did dozens of little known scientists and junior officers who solved practical problems on the front lines. Here, a historian skillfully recounts the exploits of the extraordinary but little-recognized men and women whose resourcefulness helped carry the Allies to victory.
Eisenhower’s Secretary of State and his brother called the shots in American foreign policy for more than a decade, waging secret wars and bullying adversaries to combat Communism and promote Big Business. Working from newly opened archives, the author has turned up evidence of several unsuccessful attempts by the U.S. to assassinate foreign leaders. No history of the Cold War is complete without an understanding of the seminal roles played by the Dulles brothers.
Forget just about everything you learned in school about the peoples who lived in the Western Hemisphere before 1492 — and about the land, too. It turns out that yesterday’s historians, anthropologists, paleontologists, and ecologists got it pretty much all wrong. In this revised edition of a 2006 bestseller, we learn that the Americas before Columbus were far more heavily populated, the leading civilizations far more sophisticated, and their origins far further back in time than earlier generations of scholars had suspected.
This is the astonishing story of Aravind Eye Care, a nonprofit, family-run opthalmological empire based in South India that exceeds the standards of eye care in Britain and the US, pioneers in advanced opthalmology, trains eye surgeons from dozens of other countries — and consistently turns a profit. The book is beautifully written by a latter-day descendant of Aravind’s founder.
Though commercial trade is far and away the dominant feature of the economic relationship between Africa and the so-called West, most of the attention in the new media tends to focus on aid — the decades-long project of the world’s richest nations to end poverty on the continent. Economist Jeffrey Sachs’ ill-advised and egregiously expensive Millennium Villages Project stands out as a symbol of just how badly wrong those efforts have gone.
If you treasure your freedom as an American . . . if you’re concerned about how the U.S. Government spends your tax money . . . or if you simply want to understand how our country is managed . . . you owe it to yourself to read this brilliant book. Alternately mind-boggling and blood-curdling, Top Secret America is the most impressive piece of investigative journalism I’ve read in years. Dana Priest and Bill Arkin have written a book that, in a rational world, would usher in an orgy of housecleaning through the far reaches of the Pentagon, the CIA, the NSA, the FBI, the Department of Homeland Security, and every other department, agency, or office that pretends to be involved in strengthening our national security.
Grounded in thirty years of dogged research, including mountains of documents from Freedom of Information Act lawsuits, a brilliant investigative journalist reveals the close collaboration between J. Edgar Hoover and Ronald Reagan that brought violence to a generation of college students and the Right Wing to the White House.
Why is Scientology such an object of fascination when its followers (estimated at 25,000 in the US) are less than half as numerous as those who identify themselves as Rastafarians? Lawrence Wright provides the definitive answer to this question. Just seven years ago Wright’s masterful book about Al Qaeda, The Looming Tower, won the Pulitzer Prize for General Nonfiction. If anything, Going Clear represents an even greater accomplishment, putting to shame previous efforts to tell the story of the notoriously secretive and litigious cult called Scientology. In the pages of this brilliant book, the cast of far-fetched characters who populate the Church come to life, their pretensions, insecurities, contradictions, and (often) mental illnesses on display for all to see — despite Wright’s intensive effort to be fair at every turn.
@@@@@ (5 out of 5)
This book is full of surprises.
In The Tyranny of Experts, the author of the seminal book The White Man’s Burden drills down into the history of economic development around the world in search of its causes. What he finds has little to do with any of the factors bandied about among contemporary development professionals.
“The conventional approach to economic development, to making poor countries rich,” William Easterly writes, “is based on a technocratic illusion: the belief that poverty is a purely technical problem amenable to such technical solutions as fertilizers, antibiotics, or nutritional supplements . . . The technocratic approach ignores what this book will establish as the real cause of poverty — the unchecked power of the state against poor people without rights.”
Instead, Easterly maintains, the fundamental pre-condition for successful development is democracy paired with deep understanding of local history. He calls the establishment of the World Bank “the moment of original sin . . . in which the Bank disavowed the ideals of freedom . . .”
Academia has been good to William Easterly. Presumably, when he was forced out of the World Bank because of his outspoken criticism of the Bank’s support for corrupt regimes and pro-Western favoritism, he was looking for a platform on which he could continue his campaign to shift the consensus among development professionals from top-down “solutions” to support for bottom-up, grassroots initiatives. He’s gotten that platform, but his position on the faculty of New York University has also moved him to dig more deeply into the intellectual roots of his thinking. The Tyranny of Experts is one result.
This book is intellectually very ambitious. Easterly finds the common denominator for successful development not in policies, procedures, or leaders but in an environment in which the rights of poor people are respected. On the most fundamental level, he insists, the biggest success stories in development are to be found in what we’ve grown used to calling “the West.” In these rich countries, democratic government accountable to voters left them essentially free to exercise their genius for innovation. Variations on the capitalist system provided the incentives for individual initiative and hard work, the result of which has been a meteoric increase in per capita income during the past two centuries in the West, compared with a slow increase for the Rest. Yet development professionals ignore the stunning, long-range success of the West and turn instead to models based on short-term (and usually temporary) growth spurts.
In recent decades, it has been fashionable to point to China as proof that development is best facilitated by “benevolent tyrants.” Easterly finds this argument unconvincing for at least three reasons:
(1) The major boost to Chinese productivity, and hence the biggest factor in increasing the country’s per capita income, was the grassroots movement among farmers freed from collective farms to till their own land. This development began taking hold in 1978, at the same time as Deng Xiao Peng’s accession to power, but had as much to do with the Chinese breakthrough as Deng’s actions as Secretary of the Communist Party. In fact, it was only in 1982 that the Party made official the dispersion of landholding that was already widespread throughout the country.
(2) Easterly proves that the only factor that correlates closely with sustained, high-octane development is regionalism. China, after all, lies in East Asia, home of what Easterly calls the “Gang of Four” breakthrough economies (otherwise known as the “Asian Tigers”): Taiwan, South Korea, Hong Kong, and Singapore. Statistical analysis proves that’s no accident.
(3) The anonymous spread of the potato “increased the calories, vitamins, and nutrients produced by a given amount of land, thus sustaining a larger population” and offers “more evidence for attributing the rise of China as an economic superpower” than any conscious policy of the Party, much less of Premier Deng. I found this claim so puzzling that I checked out Easterly’s facts: lo and behold, the American Journal of Potato Research reported more than a decade ago that “China is now the world’s largest potato-producing country, and nearly a third of the world’s potatoes are harvested in China and India.” (Who knew? I can’t recall ever seeing potatoes in a Chinese meal!)
One of the most valuable aspects of this book is Easterly’s habit of finding revealing truths in areas others never consider. The importance of the potato to China is just one example. Another is his conclusion that “one of the regional factors that held back African development was that Africa had too many nations.” (It’s obvious — once you read the book.)
The Tyranny of Experts is a brilliant inquiry into economic history, with excursions into political science, sociology, and other disciplines. By making a solid case for individual initiative as the driving force in development rather than the policies of leaders, William Easterly has made a major contribution to the field. However, there in one major area in which I take issue with the author.
Economist that he is, Professor Easterly uses per capita income as the exclusive measure of development. This choice is problematic both because it’s a poor reflection of the well-being of poor people (who are, after all, the principal concern of the field) and because it presumes that economic growth — the output of more and more stuff — is necessarily good. If I earn $700 per year (about $2 per day) and Bill Gates earns $2 billion, it’s small comfort to me that our “per capital income” is $1,000,000,350. And if Mr. Gates consumes enough water and electricity to maintain his 66,000-square foot house that could otherwise meet the needs of . . . well, lots of people, that’s far from good for the planet — or for you or me. (Not so incidentally, Easterly calls out Bill Gates for special criticism for his exaggerated faith in quantifying change.)
Incidentally, I also note that in two references in his book to those who comprise “development professionals” Easterly includes only staff of the World Bank, the United Nations, and the overseas aid agencies of national governments. He excludes NGOs, many of which employ large numbers of professionals working in development programs throughout the Global South. I find this peculiar.
There is so much more that’s worthy of comment in this outstanding book that I can’t possibly do justice to it in this short review. All I can say is, if you’re involved in any way in economic development work, or simply concerned about ending poverty, The Tyranny of Experts is essential reading. Despite its flaws, it’s simply brilliant.
@@@@ (4 out of 5)
Has the human race made progress since the days when all our lives were nasty, brutish, and short?
Some might think this question patently silly, since it would appear to answer itself. But Angus Deaton finds in it a point of entry into his inquiry on “health, wealth, and the origins of inequality,” the subtitle of his ambitious new book. He is in no doubt that humanity has progressed, not steadily but by fits and starts — and continues to do so to this day. “Today,” he writes, “children in sub-Saharan Africa are more likely to survive to age 5 than were English children born in 1918 . . . [and] India today has higher life expectancy than Scotland in 1945.”
In The Great Escape, Deaton, a veteran professor of economics and international affairs at Princeton, explores inequality — between classes and between countries — with a detailed statistical analysis of trends in infant mortality, life expectancy, and income levels over the past 250 years. He concludes that the large-scale inequality that plagues policymakers and reformers alike in the present day is the result of the progress humanity has made since The Great Divergence (between “the West and the rest”) since the advent of the Industrial Revolution. “Economic growth,” Deaton asserts, “has been the engine of international income inequality.”
No argument there: Deaton is far from alone in this belief. Other scholars have written extensively about this topic in recent years. A Farewell to Alms: A Brief Economic History of the World, by Gregory Clark, is just one example.
Late in the 18th Century, the countries of Northern Europe and North America on the one hand and those of Asia, Africa, the Middle East, and Latin America on the other hand were not that far apart as measured by the available indicators of health and income. Deaton cites “one careful study [that] estimates that the average income of all the inhabitants of the world increased between seven and eight times from 1820 to 1992.” However, that average obscures a harsh reality. The ever-quickening rate of change in “the West” since 1760 or so has widened the gap between (and within) countries to an extreme degree. Deaton terms the freedom from destitution and early death that so many of us now enjoy “The Great Escape,” taking his title from the 1963 film of that name about a massive escape of prisoners from a German P.O.W. camp in World War II.
Only now is the gap closing between the rich nations and China and India (by far the world’s two biggest countries, with nearly 40 percent of the planet’s population and half the world’s poor). Deaton doesn’t consider a bright future for all a certainty, not by any means, in view of global climate change and the ever-present threat of killer pandemics. But, assuming the species continues to thrive, there is sufficient data available now to have some confidence that the gross inequality now existing among nations will not persist forever. After all, five sub-Saharan African countries are now growing their economies faster than China’s.
However, that misleading factoid ignores the outsize role that China has played in “the Great Escape” globally. Deaton notes, as have other observers, that “the number [of] people in the world living on less than a (2005) dollar a day fell from about 1.5 billion in 1981 to 805 million in 2008 . . . [This] decline in numbers is driven almost entirely by the Chinese growth miracle; if China is excluded, 785 million people lived on less than a dollar a day in 1981 compared with 708 million in 2008.” (This reality is one of the principal reasons why Paul Polak and I insist in The Business Solution to Poverty that traditional methods to end poverty have largely failed. After all, China’s methods were hardly traditional!)
In the course of exploring the historical record of growing inequality on the world stage, Deaton delves deeply into the role of foreign aid (officially, Overseas Development Assistance, or ODA) and finds it comes up short. “You cannot develop other countries from the outside with a shopping list for Home Depot, no matter how much you spend,” he writes. With the exception of outside interventions in public health programs — including such breakthroughs as the eradication of smallpox and the near-success with polio — Deaton finds that foreign aid has done more harm than good. He argues that where the conditions for development are present, outside resources are unnecessary. Where they’re absent, ODA entrenches local elites, distorts the local economy, and discourages local initiative. The author insists that “the record of aid shows no evidence of any overall beneficial effect.”
But that’s only part of the story.
In 2012, ODA totaled about $136 billion. Throw in another $30 billion or so from NGOs, and total outside assistance comes to under $200 billion annually. However, net resource transfers from developing countries to rich countries are well in excess of $500 billion annually. (Transfers reached a peak of $881 billion in 2007, fell with the Great Recession, but are rising again.) Quite apart from the fact that an estimated 70 percent of “foreign aid” is actually spent on products and services from donor nations, ODA merely puts a dent in the huge disadvantage that poor countries suffer as a result of lopsided trade policies and prevailing political and commercial imbalances. In any case, just one factor in those resource flows — remittances from overseas residents of poor countries to their families back home — are twice as large as ODA.
The Great Escape is a worthy effort from a senior scholar whose wide-ranging studies have led him to big-picture conclusions. Policymakers and practitioners should be listening carefully.
@@@@@ (5 out of 5)
It’s difficult even to dip your toes into the field of poverty without tripping over the Millennium Villages Project. So extensive has been the coverage of this ambitious – some would say hubristic – endeavor that scholars may spend years sifting through the documented record. But anyone curious about the Millennium Villages need only read The Idealist, financial journalist Nina Munk’s eminently readable and extensively researched account of the Project and the extraordinarily gifted man who conceived and forced it on the world’s consciousness. Munk’s first-hand account should stand for years as the authoritative judgment on this ill-considered venture.
The Millennium Villages Project grew from a newfound concern with poverty in the mind of Jeffrey Sachs. Then a celebrated professor of economics at Columbia University and head of its Earth Institute, Sachs fastened on the idea of investing large sums of money in a dozen selected villages around sub-Saharan Africa to perform a sort of “shock therapy” that would lift the lucky residents out of poverty in five years and demonstrate to the world how anti-poverty work should be done. He set a goal of raising $120 million to fund the program, allowing for a budget of $120 per resident per year, for a total of $600 throughout its five-year duration. His goal was to achieve such undeniable success that the major foreign aid donors – the Americans, the Europeans, the Japanese – would then leap at the chance to pour hundreds of billions of dollars into replicating the Project throughout the African continent.
You don’t need to know any more than this to understand that Sachs’ vision was fatally flawed and the Millennium Villages Project doomed to failure. An investment of $600 per person in lifting people out of poverty is an unconscionably large amount of money that no one in his right mind would ever agree to replicate. In any case, we learned long ago (or at least should have learned) that you can’t donate people out of poverty: what would come after the five years, the $600 were used up, and the Project staff no longer around? Would anyone in the villages have learned anything except that manna came from heaven? And, to top it off, the foreign aid agencies, the World Bank, and other big funders all had agendas of their own and would be extremely unlikely to follow Sachs’ lead even if they didn’t already consider him an arrogant and misguided pest. Regardless of the Project’s outcome, they were never going to fund its rollout.
If you have any field experience in developing nations working with people who live on, say, $2 a day or less, you’re not likely to find any surprises in The Idealist. The Millennium Villages Project failed in ways that were entirely predictable. But you may well enjoy the tale nonetheless. The author lays it out in devastating detail.
Once upon a time Jeff Sachs was a superstar. He was a wunderkind, a word that always seemed to be attached to his name in the voluminous press reports that featured him. Sachs was the guy who had miraculously rescued the economies of Bolivia and Poland with “shock therapy.” A Harvard professor of economics, an extraordinarily young tenured member of the faculty, he was widely regarded as the brightest light of the department, and for several years he could (apparently) do no wrong.
Then came Sachs’ assignment to Russia as it reemerged an independent nation from the ruins of the Soviet Union, and things didn’t work out so well. But Sachs protested that he wasn’t really in charge, and that the critics who characterized his performance there as subpar didn’t know what they were talking about. Somehow, he escaped with his reputation virtually unscathed. in 2002, Columbia University lured him away from Harvard with an obscenely large amount of money, including a $9 million town house in Manhattan, an endowed chair, and the leadership of an entity called the Earth Institute that allowed him to continue working as an international activist on the margins of academia. And when he turned his attention to world poverty, he somehow managed to raise an astonishing $120 million to fund his Millennium Villages Project – and even, five years later, an additional $60 million or so for a “phase two” of the project that hadn’t been originally planned.
That was then. Now, with a second major failure hanging so visibly around his neck, Jeff Sachs may well have seen the last of his 15 minutes of fame. Perhaps now people will be saying that Sachs was simply too smart for his own good.
Nina Munk is a long-time financial journalist whose work has appeared in numerous publications. She is now a contributing editor at Vanity Fair. In 2006, having had her fill of billionaires, she set out to learn and write about poverty. Sachs’ Millennium Villages Project was the biggest thing going, and she’d found her subject. She followed the Project’s work throughout its duration, including extended stays in the two Millennium Villages in Uganda and Kenya. The Idealist thus represents the culmination of years of work. It’s a brilliant example of honest, in-depth journalism of the sort so rarely seen in these hurried times.
For links to my reviews of other excellent biographies, go to 34 great biographies I’ve reviewed.
As I’ve dug more deeply into the subject of global poverty in the course of writing The Business Solution to Poverty with Paul Polak, it has become increasingly clear to me that truly understanding how today’s glaring inequities have come about requires extensive knowledge in a wide array of topics, from Third World history to social psychology, development economics to the history of business and international trade.
Well, I confess I’m no expert in any of those fields. I’ve read widely in some, superficially in others, and I’m learning a lot.
My reading has emphasized economic history, the economics of poverty, colonialism, Third World development, social enterprise, and the ongoing debate about the impact of “foreign aid” (more properly, overseas development assistance). Along the way, I’ve reviewed in my blog many of the books I’ve read.
In previous posts, I’ve offered up reading lists on some of these subjects individually. Here, I’m sharing a compiled list. I’ve read all these books — some before I began my blog, so that I haven’t reviewed them. Where I’ve reviewed a book, you’ll find boldfacing and underlining that signifies a link to my review. The books are listed alphabetically by the author’s last name.
Bornstein, David, How to Change the World: Social Entrepreneurs and the Power of New Ideas. Oxford University Press, 2007.
——, The Price of a Dream: The Story of the Grameen Bank. Oxford University Press, 2005.
Clark, Gregory, A Farewell to Alms: A Brief Economic History of the World. Princeton University Press, 2007.
Cohen, Ben, and Mal Warwick, Values-Driven Business: How to Change the World, Make Money, and Have Fun. Berrett-Koehler Publishers, 2006.
Collier, Paul, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. Oxford University Press, 2007.
Crutchfield, Leslie R., and Heather McLeod Grant, Forces for Good: The Six Practices of High-Impact Nonprofits, 2nd Edition. Jossey-Bass Publishers, 2012.
Diamond, Jared, Collapse: How Societies Choose to Fail or Succeed. Viking Press, 2005.
Easterly, William, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Penguin Press, 2006.
Guha, Ramachandra, India After Gandhi: The History of the World’s Largest Democracy. HarperCollins Publishers, 2007.
Hochschild, Adam, King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa. Houghton Mifflin Company, 1998.
Light, Paul Charles, The Search for Social Entrepreneurship. Brookings Institution Press, 2008.
Lynch, Kevin, and Julius Walls, Jr., Mission, Inc.: The Practitioner’s Guide to Social Enterprise. Berrett-Koehler Publishers, 2008.
Moyo, Dambisa, Dead Aid: Why Aid is Not Working and How There Is a Better Way for Africa. Farrar, Straus and Giroux, 2009.
Prahalad, C. K., The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. Pearson Prentice Hall, 2004.
Sachs, Jeffrey D., The End of Poverty: Economic Possibilities for Our Time. Penguin Press, 2005.
Sullivan, Nicholas P., You Can Hear Me Now: How Microloans and Cell Phones Are Connecting the World’s Poor to the Global Economy. Jossey-Bass Publishers, 2007.
Wrong, Michaela, It’s Our Turn to Eat: The Story of a Kenyan Whistle-Blower. HarperCollins Publishers, 2006.
My co-author, Paul Polak, and I are now putting the final touches on the manuscript, and it’s got months of design and production ahead. But the new book will be published this year by Berrett-Koehler, the San Francisco firm that brought out an earlier book of mine, Values-Driven Business: How to Change the World, Make Money, and Have Fun (co-authored with Ben Cohen of Ben & Jerry’s fame). The official publication date for the new book is Sept. 9.
Its title is The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers.
It’s premature to tell you much about the book, but I thought you might like to know a little about my co-author, Dr. Paul Polak.
Paul Polak is widely regarded as the father of market-centered approaches to development. He started harnessing the energy of the marketplace 30 years ago when IDE, the organization he founded, sold one-and-a-half million treadle pumps to small farmers in Bangladesh, increasing their net income by more than $150 million a year. Over the past 30 years, he has had long conversations with more than 3,000 small farmers who live on less than $1 a day and walked with them through their fields. IDE has now enabled 20 million of the world’s poorest people to move out of poverty by selling them radically affordable irrigation tools made available through thousands of small village manufacturers, dealers, and well drillers, and opening smallholder access to markets where they could sell their crops at a profit.
Paul’s earlier book, Out of Poverty: What Works When Traditional Approaches Fail, has been widely used as a basic text on practical solutions to rural poverty. He is the founder and CEO of Windhorse International and co-founder and board chairman of Spring Health India, for-profit companies with the mission of bringing safe drinking water to 100 million poor rural customers in the world. Paul is the prime mover for creating and implementing the four social impact multinationals in this book, each designed to transform the lives of 100 million $2/day customers and generate annual sales of $10 billion.
Prior to founding Windhorse, in 2008 Paul established D-Rev, a nonprofit that seeks “to create a design revolution by enlisting the best designers in the world to develop products and ideas that will benefit the 90 percent of the people on earth who are poor, in order to help them earn their way out of poverty. Paul’s vision inspired Smithsonian’s Cooper Hewitt travelling exhibit, “Design for the Other 90 percent.” He was named by The Atlantic as one of the world’s 27 “Brave Thinkers” along with Steve Jobs and Barack Obama. He has also received the Ernst and Young Entrepreneur of the Year award and the Scientific American “Top 50” award for agricultural policy.
Paul graduated from medical school in 1958, worked for 23 years as a psychiatrist, creating innovative models of community treatment, and at various points in his career also worked as a farmer and a hands-on investor in oil and gas, real estate, and equipment leasing. He and his wife Agnes have been happily married for 53 years, and have three grown daughters. At the age of 79, he still puts in an 80-hour work week and loves what he does.
A review of Confessions of a Microfinance Heretic: How Microlending Lost Its Way and Betrayed the Poor, by Hugh Sinclair
@@@@@ (5 out of 5)
“Some microfinance is extremely beneficial to the poor, but it is not the miracle cure that its publicists would have you believe. Microfinance has been hijacked by profiteers, and we need to reclaim it for the poor. The problem is not with a few rogue operators, alas, but with systemic flaws that permeate the sector.”
Thus does Hugh Sinclair lay out the thesis he pursues in Confessions of a Microfinance Heretic. If you skip over this statement in the opening pages of the book, you could easily conclude that Sinclair can see no good at all in the $70 billion industry that has grown up under the impetus of Muhammad Yunus’ 2006 Nobel Peace Prize. After all, Sinclair writes — at least twice — that he wouldn’t invest a single dollar in microfinance today. Nonetheless, he insists that the “debate is not whether microfinance works, but how the inherent conflicts of interest can be managed.”
The systemic flaws Sinclair perceives are eye-opening:
Despite all this, there is NO documented evidence that microfinance has achieved any reduction at all in the level of poverty. As a 2007 article in the Harvard Business Review stated, “In 1991, for example, Bangladesh ranked 136th on the UN Development Programme’s Human Development Index (a measure of societal well-being); 15 years later it ranked 137th.” And Sinclair writes, “In 2001, Nicaragua was the 106th poorest country in the world . . . Microfinance was almost unheard of in Nicaragua at this point, and there were no large microfinance funds throwing money around. By 2009, when the full Nicaraguan microfinance meltdown occurred, Nicaragua had slipped to 124th place.”
Hugh Sinclair is no cranky, slapdash journalist taking on a controversial subject for the sake of selling books. He is a ten-year veteran of the microfinance industry and has been involved as either an employee or a consultant in dozens of MFIs around the world and in several microfinance funds. He clearly knows whereof he writes, his citation of sources is extensive, and his publisher, Berrett-Koehler, is a highly respected source of books on business and current affairs.
Confessions of a Microfinance Heretic is an important book that should be must reading for anyone involved in international development.
During the last several years — mostly after I bought my first Kindle — I’ve spent a great deal of time reading, roughly half of it fiction, the other half non. I’ve gotten through hundreds of books and have reviewed the last 200 or so in this blog. It feels like a good time to cast a backwards look and identify those books that remain vivid in my memory — books that helped me understand the way the world works. Though most of the fiction I’ve read has been simply enjoyable, a few have touched me. None, though, have really nestled deep into memory and changed the way I view life and the world. I learn mostly from nonfiction. Whatever that says about my character — so be it.
Here, then, are the 20 nonfiction books that have impressed me the most in recent years. They’re arranged in alphabetical order by the authors’ last names. Those I’ve reviewed are boldfaced and linked.
Alexander, Michelle, The New Jim Crow. A shocking survey of the consequences of America’s so-called War on Drugs and the racism in our justice system
Banerjee, Abhijit, and Esther Duflo, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. A rigorous and balanced view of both top-down and bottoms-up development policies in the light of field research
Clark, Gregory, A Farewell to Alms: A Brief Economic History of the World. History as I like it: painted in broad swaths across the millennia, rejecting the myth that the “West” was destined to rule the world
Diamond, Jared, Guns, Germs, and Steel: The Fates of Human Societies. A brilliantly original view of world history from a geographer’s perspective, ascribing variable levels of development primarily to environmental and geographical factors
Easterly, William, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. The case against foreign aid and top-down development, by a former World Bank economist
Elkington, John, and Pamela Hartigan, The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World. The liveliest and most insightful of several books on social entrepreneurs
Gladwell, Malcolm, The Tipping Point: How Little Things Can Make a Big Difference. The seminal book on understanding “six degrees of separation” and the way networks work
Harden, Blaine, Escape from Camp 14: One Man’s Remarkable Odyssey from North Korea to Freedom in the West. A riveting tale of the North Korean gulag, spotlighting the reality of repression in the Kim family’s private kingdom
Hochschild, Adam, King Leopold’s Ghost: A Story of Greed, Terror, and Heroism in Colonial Africa. One of the most troubling books I’ve ever read about the legacy of colonialism: the harrowing story of how the Belgian King destroyed the Congo and murdered millions of its people
Johnson, Chalmers, Blowback: The Costs and Consequences of American Empire. A scholar and former U.S. official demonstrates how the U.S. dominates the world through hundreds of military bases, undermining our nation’s reputation and robbing our society of the means to address pressing social problems
Larson, Erik, In the Garden of Beasts: Love, Terror, and an American Family in Hitler’s Berlin. An eye-opening account of U.S. official anti-Semitism in FDR’s Administration that shackled our Ambassador in Berlin who witnessed the outrageous acts unfolding in Nazi Germany
Mann, Charles C., 1491: New Revelations of the Americas Before Columbus. A revisionist view of Native American society in both North and South America, offering proof of huge populations and sophisticated civilizations in the present-day U.S. and in the Amazon Basin
Miller, Brian, and Mike Lapham, The Self-Made Myth: And the Truth about How Government Helps Individuals and Businesses Succeed. A clear-eyed look beyond the bounds of Right-Wing ideology at the immeasurable benefits and services every “self-made man” has received from U.S. society
Mukherjee, Siddhartha, The Emperor of All Maladies. An oncologist’s brilliant history of cancer and of the medical profession’s slowly developing success in treating it
Polak, Paul, Out of Poverty: What Works When Traditional Approaches Fail. How a former psychiatrist, laboring face-to-face with $1-a-day farmers in some of the world’s poorest countries, helped 17 million families escape from poverty
Priest, Dana, and William M. Arkin, Top Secret America: The Rise of the New American Security State. A Pulitzer-Award-winning Washington Post reporter and her researcher rip the cover from the enormous intelligence establishment built after 9-11
Skloot, Rebecca, The Immortal Life of Henrietta Lacks. A science reporter’s captivating ten-year search to understand the consequences of a medical crime committed in an overtly racist era before the rise of medical ethics
Ward, Vicky, The Devil’s Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers. The most intimate and candid account of how Wall Street played the central role in launching the Great Recession
Wrong, Michela, It’s Our Turn to Eat: The Story of a Kenyan Whistle-Blower. A vivid account by a Financial Times reporter of how corruption holds sway even in one of Africa’s most developed economies
@@@@@ (5 out of 5)
Public debate about the way to combat global poverty has ricocheted between two extremes. One was summed up in 2005 in The End of Poverty by Jeffrey Sachs, the Columbia economist who spearheaded the UN Millennium Development Goals. The other was laid out by former World Bank economist William Easterly the following year in The White Man’s Burden. Sachs advocates massive government-to-government foreign aid. Easterly deplores foreign aid, convinced that it does more harm than good.
In Poor Economics, Abhijit Banerjee and Esther Duflo seek a path between these two extremes, emphasizing the Randomized Controlled Studies they and their colleagues had conducted to ascertain what works and what doesn’t. (As of 2010, they had completed more than 240 studies in forty countries around the world.)They characterize Easterly’s approach as demand-driven, since he believes that poor people must seek their own solutions — a conservative, free-market attitude. By contrast, Sachs’ approach is supply-driven, reflecting Sachs’ conviction that a government must provide for its people based on consensus thinking about what poor people need — a liberal, top-down attitude. (I find myself bemused that I’m on the right side of this debate.)
Banerjee and Duflo report that their observations and research results support each of these two approaches — and sometimes both — depending on what issue they study. Hunger, health, education, financial services, family planning, business development, policy options: each field offers up a unique picture of success and failure attributed to one or another of the two approaches. In other words, circumstances and details matter, all of which may vary from one country to another. There is no silver bullet, they assert, no panacea to eliminate poverty.
Poor Economics focuses on the overarching question of whether there is such a thing as a “poverty trap.” Sachs contends there is: poor people will be stuck in poverty unless and until they are given the resources to release themselves from the trap. In many circumstances, Banerjee and Duflo find scant evidence to support this assertion. In others, however, they see the need for government intervention in the lives of the poor because otherwise they will perceive no reason to act for themselves.
Rather than identifying a simple, unitary explanation why Sachs’ approach often fails, they emphasize “ideology, ignorance, and inertia — the three I’s — on the part of the expert, the aid worker, or the local policy maker.” These three I’s, they claim, “often explain why policies fail and why aid does not have the effect it should.” Banerjee and Duflo explain further: “The poor often resist the wonderful plans we think up for them because they do not share our faith that those plans work, or work as well as we claim.”
It would be difficult to find two scholars better prepared than Abhijit Banerjee and Esther Duflo to forge a middle course through the opposite poles of thought about global poverty erected by Jeffrey Sachs and William Easterly. Banerjee, an Indian economist who is also the son of two economists, holds an endowed chair in economics at MIT. He co-founded MIT’s Abdul Latif Jameel Poverty Action Lab with Duflo, a French economist and a former MacArthur Fellow (recipient of the “genius” award).
For anyone who seeks deeper understanding of global poverty and the ways and means of fighting it, Poor Economics is must reading. This book is the latest I’ve read in my ongoing effort to study world poverty. For a list of additional books on the topic, go to my reading list.