Poor Economics, Poor Policy?


In the remainder of their book, authors Banerjee and Duflo analyze the controversy surrounding the debate on development aid in foreign countries. Their discussion centers around the respective arguments of acclaimed economists Jeffrey Sachs (Columbia University) and William Easterly (NYU).

Easterly argues that the political institutions themselves are the key component to bringing about good policy. “If the politics are right, good policies will eventually emerge. And conversely, without good politics, it is impossible to design or implement good policies, at least not on any scale” (p. 236). He believes that developing nations need to find their own way to reform, and that the most critical element in getting better is freedom. The free market would drive citizens of these nations to pursue ambitions, and seek out education and healthcare. Freedom and democracy, however, cannot be brought from foreign influences. It is a development that Easterly believes should come from the nation itself. The most that foreign parties can do, he says, is advocate for human equality and civil rights (p. 242). But how can a bad institution change itself? Will changing the institution truly make a difference, or can small changes make an impact? Both authors like the idea of giving more power to the people, but not too much power. They believe that decentralization should come from a centralized power, to ensure that the elite don’t grab all the power, and minority interests are represented.

Banerjee and Duflo highlight an interesting point when they recognize individual efforts in developing countries to fight corruption, for example, school headmasters in Uganda calling out government officials for not sending full funds to school. This level of fighting corruption, on a small and gradual scale, though not a political or institutional revolution, can make a big difference (p.237).  However, a corrupt or ineffective institution greatly inhibits the development and growth of a country. “Bad institutions tend to perpetuate bad institutions, creating a vicious circle, sometimes called the ‘iron law of oligarchy'” (p. 238). This is a trend that has plagued many of the developing nations in Africa, where the political leaders don’t find it in their best interests to create economic institutions that benefit the whole of society. Rather, they maintain the systems that make them rich, without regard to the poor. And so, these nations get stuck with bad political and economic institutions. While both Easterly and Sachs believe many perspectives on institutions in poor countries are misplaced in the fact that some experts view them as a hopeless case, I think Sachs view towards helping these countries is more proactive and viable to make a difference. I believe that Banerjee and Duflo emphasize this point as well.

Sachs views political corruption as a poverty trap in itself, with corruption causing poverty, and poverty causing corruption. With this perspective, Sachs holds that improving the living conditions of the poor, and contributing aid to achieve specific goals and raise the standard of living, would thereby lead civil society and the government to conduct itself in a better way (p. 236). Improving conditions can be a process with many steps, but that doesn’t mean it’s less effective than widespread political change. The authors identify that, “politics is not very different from policy: It can (and must) be improved at the margin, and seemingly minor interventions can make a significant difference” (p. 253). There is a complex relationship between politics and policy, and “large-scale waste and policy failure often happen not because of any deep structural problem, but because of lazy thinking at the stage of policy design” (p. 261). So, politics are not the end-all, be-all solution to solving the problems in these developing nations. I am more inclined to side with Sachs view of developing and achieving specific goals and and milestones in developing nations, as an effective way of implementing change. Making people aware of their rights, holding people accountable and setting standards to follow makes it easier to make strides towards progress. In the end, the journey to eradicating poverty will be a long and winding one; far from simple and far from easy. There is no single, clear cut solution. I think a combination of foreign aid and institutional reform will be necessary to see change in developing nations, but results will not be seen immediately. Change will come gradually, and just as Banerjee and Duflo point out, the small victories should be recognized.


Laura Poitras

Laura Poitras. Image courtesy of http://www.hollywoodreporter.com/news/laura-poitras-citizenfour-oscar-winner-821500

Laura Poitras’ venture, Field of Vision, uses documentary film as a tool towards educating the public about developing stories from across the world. There is a special emphasis on short-form films, which allows for a quicker production cycle, as well as more freedom to take risks and explore new and creative ways for filmmakers and artists to reach audiences. I think Poitras’ concept is a very intriguing and effective one. I believe that the general public is drawn to cinematic mediums, and would be more interested and inclined to watch a short film about global issues then perhaps seek out the global current events section of a newspaper. Short-form documentary film combines the art of cinematography and drama, with the important task of telling the stories of relevant global issues from a variety of perspectives. Film can be an extremely effective medium for sending a message and inciting emotion and thought in people. I know that very often, I am engaged by film, and a particularly good film can cause me to think about its content and message long after I watch it. This mode of story telling could illustrate what is going on in developing nations and make people more aware of the need for change. Perpetuating the media and pop culture could be a very effective way to reach mass audiences and educate them about global issues, and I think Poitras’ website is a good example of how to do so. Check it out: https://fieldofvision.org/#films







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