Posts Tagged ‘William Easterly’

Carol Graham on William Easterly on migration

Tuesday, March 17th, 2015

Carol Graham, a Brookings Senior Fellow, and Professor at the University of Maryland School of Public Policy, reviews William Easterly’s The Tyranny of Experts (Basic Books, 2015).

Here is her take on Easterly’s views on the connection between migration and economic development (pp. 96-97 of the review article):

[Easterly] makes the case that the focus of development policy on nations rather than individuals has kept millions of people trapped in poverty. The tyranny of experts has focused on Zambia and Bolivia, for example …, rather than on Zambians and Bolivians. …. Zambians … have lower levels of per capita income than they did fifty years ago. Yet if they had had the flexibility of out-migration when their copper industry collapsed, as West Virginia did when its coal mining industry collapsed, the population of Zambia would be much smaller today. As a result, real wages would, at the least, not have been compressed and poverty would not have increased as much as it did. While not reversing the already high poverty rates in West Virginia, out-migration kept it from getting poorer. ….

I am very sympathetic to this argument. There are two unresolved problems, though. The first is that we still live in a world where nation-states matter and the political constraints to free labor movement across international borders remain insurmountable ….

The second is that there is selection bias in terms of who has the wherewithal to pick up and leave. My own work and that of my former students, based on intent to migrate data from Latin America, shows that respondents who intend to migrate in the next year are, on average, wealthier and more educated than the average, but also less satisfied with their lives and more critical of their economic situations. ….

I am left wondering what Zambia or Bolivia would look like if all of those with the most wherewithal just picked up and left. I agree with many others that more open borders would do more to reduce poverty than can ever be achieved via foreign aid; the big issue of course is whether such a proposal would ever be politically feasible. In addition, I do not think that we have a good answer to the question of what these places would look like if all of those with the ability to exercise their rights to exit did so ….

Carol Graham, “A Review of William Easterly

Bill Easterly is back

Saturday, January 25th, 2014

Bill Easterly ceased blogging long ago, and also stopped writing newspaper columns. He now returns, with a spirited op-ed written for the Financial Times. In it, he takes aim at Bill Gates who, in a recent interview with The Economist, praised the efforts of wealthy donors and foreign aid to reduce poverty around the world. Mr Easterly, in contrast, believes “The contribution made by philanthropists and politicians should not be overplayed.”

Mr Gates is right that the world

choosing the next World Bank president

Sunday, April 15th, 2012

Tomorrow – Monday, March 16th – the World Bank board will name the next World Bank president. Two candidates – Jeffrey Sachs and Jos

lest we forget

Tuesday, July 5th, 2011

Arnold Kling reminds us that this is how NYU economist Bill Easterly declared independence:

Unfortunately, with some exceptions, multilateral and bilateral agencies had incentives to continue lending even when recipient government actions destroyed any hope of economic growth. Sometimes donors and multilaterals gave aid and loans only because the function of donors and multilateral agencies is to give aid and loans. Sometimes aid lenders gave loans to enable old aid loans to be repaid. Sometimes donors gave aid because the recipient countries were political allies of the donor countries. Recipient governments promised the multilateral agencies that this time they would reform, like alcoholics promising never to drink again.

William Easterly, “The failure of development“, Financial Times, 4 July 2001.

It was for writing this, that he was fired from the World Bank.

‘failed state’ as a failed concept

Monday, January 18th, 2010

One can only speculate about the political motives for inventing an incoherent concept like


Friday, December 11th, 2009

Despite Climategate, even a superficial reading seems to indicate that there is enough evidence for effects of man-made activity on the climate.

Surprisingly, there is a lot less evidence for effects of man-made activity on something that actually is completely man-made: the rate of economic growth in each country.

I had this frustrating thought as I was reading an important new paper,

the poverty of international GDP estimates

Tuesday, December 8th, 2009

UPDATE: My suggested robustness check has been done! Two European researchers, from ICREA-Universitat Pompeu Fabra and the European Central Bank, ran tons of regressions, and report

the PWT 6.2 revision of the PWT 6.1 1960-96 data lead to substantial changes regarding the role of government, international trade, demography, and geography. Overall, our findings suggest that margins of error in the available income data are too large for empirical analysis that is agnostic about model specification.

Antonio Ciccone and Marek Jarocinski, “Determinants of Economic Growth: Will Data Tell?”, September 2009.

HT to Bill Easterly for the pointer.

Domestic prices differ from country to country. Services, especially, are much cheaper in poor countries compared to rich countries. Market exchange rates will thus understate the real GDP of a poor country relative to that of a rich country. Prices are the weights used to add up GDP, so GDP growth rates are also biased when prices differ from country to country. Successive versions of the Penn World Table (PWT), continuing work begun by Irving Kravis, Alan Heston, and Robert Summers (1978), adjust national GDP by measuring it with common international prices, known as purchasing power parity (PPP) prices.

Four economists from distinct institutions (three US universities and the IMF) in joint research examine PWT versions 6.1 and 6.2, “two seemingly minor revisions in the Penn World Table mark 6”, and find huge differences between the two sets of data. This raises doubts concerning the quality of the PWT data, so they urge researchers instead to use national accounts data – at least for comparative analysis of annual growth rates – even though they are not PPP-adjusted.

A puzzling feature is that data

institutions and economic growth

Tuesday, December 1st, 2009

MIT economist Daron Acemoglu argues that differences in institutions are the reason residents of countries like Canada and Japan enjoy incomes that are much higher than those in countries like North Korea or Ethiopia.

How do we know that institutions are so central to the wealth and poverty of nations? Start in Nogales, a city cut in half by the Mexican-American border fence. There is no difference in geography between the two halves of Nogales. The weather is the same. The winds are the same, as are the soils. The types of diseases prevalent in the area given its geography and climate are the same, as is the ethnic, cultural, and linguistic background of the residents. By logic, both sides of the city should be identical economically.

And yet they are far from the same.

On one side of the border fence, in Santa Cruz County, Arizona, the median household income is $30,000. A few feet away, it’s $10,000. On one side, most of the teenagers are in public high school, and the majority of the adults are high school graduates. On the other side, few of the residents have gone to high school, let alone college. Those in Arizona enjoy relatively good health and Medicare for those over sixty-five, not to mention an efficient road network, electricity, telephone service, and a dependable sewage and public-health system. None of those things are a given across the border. There, the roads are bad, the infant-mortality rate high, electricity and phone service expensive and spotty.

The key difference is that those on the north side of the border enjoy law and order and dependable government services

health care as a human right

Tuesday, October 13th, 2009

NYU economist Bill Easterly has a column in today’s Financial Times that seems to reject the idea of universal health care, even for a country as wealthy as the US. I was not convinced.

The agonising US healthcare debate has taken on a new moral tone. President Barack Obama recently held a conference call with religious leaders in which he called healthcare

the elusive search for causes of growth

Tuesday, September 22nd, 2009

The success of the East Asian Gang of Four