Amazon.com
Celebrated economist Jeffrey Sachs has a plan to eliminate extreme poverty around the world by 2025. If you think that is too ambitious or wildly unrealistic, you need to read this book. His focus is on the one billion poorest individuals around the world who are caught in a poverty trap of disease, physical isolation, environmental stress, political instability, and lack of access to capital, technology, medicine, and education. The goal is to help these people reach the first rung on the "ladder of economic development" so they can rise above mere subsistence level and achieve some control over their economic futures and their lives. To do this, Sachs proposes nine specific steps, which he explains in great detail in The End of Poverty. Though his plan certainly requires the help of rich nations, the financial assistance Sachs calls for is surprisingly modest--more than is now provided, but within the bounds of what has been promised in the past. For the U.S., for instance, it would mean raising foreign aid from just 0.14 percent of GNP to 0.7 percent. Sachs does not view such help as a handout but rather an investment in global economic growth that will add to the security of all nations. In presenting his argument, he offers a comprehensive education on global economics, including why globalization should be embraced rather than fought, why international institutions such as the United Nations, International Monetary Fund, and World Bank need to play a strong role in this effort, and the reasons why extreme poverty exists in the midst of great wealth. He also shatters some persistent myths about poor people and shows how developing nations can do more to help themselves.
Despite some crushing statistics, The End of Poverty is a hopeful book. Based on a tremendous amount of data and his own experiences working as an economic advisor to the UN and several individual nations, Sachs makes a strong moral, economic, and political case for why countries and individuals should battle poverty with the same commitment and focus normally reserved for waging war. This important book not only makes the end of poverty seem realistic, but in the best interest of everyone on the planet, rich and poor alike. --Shawn Carkonen
Book Description
A landmark exploration of the way out of extreme poverty for the world's poorest citizens
Among the most eagerly anticipated books of any year, this landmark exploration of prosperity and poverty distills the life work of an economist Time calls one of the world's 100 most influential people. Sachs's aim is nothing less than to deliver a big picture of how societies emerge from poverty. To do so he takes readers in his footsteps, explaining his work in Bolivia, Russia, India, China, and Africa, while offering an integrated set of solutions for the interwoven economic, political, environmental, and social problems that challenge the poorest countries. Marrying passionate storytelling with rigorous analysis and a vision as pragmatic as it is fiercely moral, The End of Poverty is a truly indispensable work.
Customer Reviews:
Read with a grain of salt. .......2007-10-05
This book covers some concepts that at face value and first read - especially people like me who are not economists - seem quite enlightening. But the more you read, the more you have to question how it seems that the view he presents is a seemingly simplistic solution to what is in reality a complex problem. One of the reviews on here talked about how it is not "infrastructure" that is key to solving the problems, but rather an access to market. I'd have to agree. Companies are not flocking to sub-Saharan Africa to utilize the labor there. Companies are moving to China and India. This is not a simple matter of infrastructure, but a matter of economic policy and much more.
The book points to some villages in rural Africa where things appear to be improving - a choice village or two where Jeffrey Sachs and the Earth Institute at Columbia pour in their resources (these are subsequently called Millennium Villages to coincide with the Millennium Development Goals) - and it makes you think that he might possibly be making some sense. However, what about generalization to a whole country? Of course if you take all your resources, all the scientific knowledge accessible to you from the Earth Institute, and then some, and pour these into a village, what village will not transform? But is it sustainable? Is it generalizable to the whole country? Change needs to occur at the policy/governmental level concurrently, in order for real success and improvement.
While this book may be interesting, it is important to remember that it is not THE way; it is A way, and along with it, it has its flaws. Ask some other economist what they think - I did, and got an earful. The opinion was that Jeffrey Sachs is just recycling his ideas that he used decades back during the 80s, and that to counter this viewpoint, I must read William Easterly. I'm sure there are others out there to read. But again, one good read does not solve all the world's ills. If you don't have access to an economist, read ALL the reviews on here because there are some other points that need to be considered. And I don't appreciate the impression I get that ideas for solving poverty in places like sub-Saharan Africa comes from a simplistic seemingly-enlightened Westernized view of "this is what is wrong with Africa".
We need to end poverty.......2007-09-28
The book is great. It puts the poverty of the world, including America into light. It lets the reader know that poverty can be ended in our lifetime. It is very serious topic and book. We have the opportunity to end poverty, but will we be the generation that sits by and watches our fellow humans starve and die of disease or not?
The book got to me in a very timely manner and was inexpensive.
Using American Wealth to End Poverty.......2007-09-18
Eradicating global poverty is a concern that Christian missionaries and activists now share with a growing number of global economists and even rock stars like Bono. The gulf between incomes in the West and developing countries complicates the missionary task, yet missionaries often have little understanding of how the global economy works.
Jeffrey Sachs is well qualified to interpret globalization since he has worked in over a hundred nations, analyzing and offering advice on national economies. He was an economics professor at Harvard University and is now Director of the Earth Institute at Columbia University. He was an economic advisor to Kofi Annan, Secretary-General of the United Nations, and to Bono.
In The End of Poverty, Sachs outlines a plan to end global poverty by 2025. He is not only a visionary but also an excellent teacher on the fundamentals of global economics. He distinguishes between three degrees of poverty: extreme poverty, representing one billion people who literally struggle for survival every day; moderate poverty, representing 1.5 billion people who live just above subsistence level; and relative poverty, representing 2.5 billion people. Sachs shows how the world economy has changed dramatically since 1980, with over half the world making economic progress. Only Africa has experienced a general increase in extreme poverty in the past 25 years. When Sachs speaks of eradicating poverty, he means primarily ending only extreme poverty by 2025.
Sachs criticizes the International Monetary Fund and the World Bank for failing to represent the interests of the poor and advocates "clinical economics" which gives a scientific diagnosis of each nation's economic problems with a prescription for improvement. He believes that if every wealthy nation committed just 0.7 percent of Gross National Product (GNP) to foreign direct assistance, global poverty would end. The United States currently gives only 0.15 percent of GNP in such aid, far below all other wealthy nations.
Sachs offers deep insights into globalization. He states that his worldview is from the Enlightenment, so he advocates "Enlightened Globalization," meaning that he believes scientific rationalism combined with compassion can solve humanity's problems. He also sees American wealth as the key to ending global poverty and discounts the effects of differing cultures as being part of the problem. Sachs does not answer all questions about the sources and solution of poverty, but he sheds some needed light on the subject.
Another impartial diagnosis of poverty.......2007-06-21
For some populist reasons, many pundits think that poverty in poor countries, notaby in Africa, is the result of the lack of investment or commitment of western nations. Unfortunately, Dr. Sachs is one of them. In this book, he only stresses the external factors deepening extreme poverty in Third World countries, not the significance of domestic variables like the obvious lack of commitment and weak incentives to eradicate poverty. The latter is a confluence of factors, both indigenous and external. Using history as our guide, one can almost certainly say that growth has failed because of weak domestic incentives. Failing to recognize that and calling for a large-scale investment in poor countries is an unadulterated promotion of utopianism. Without prior government commitments( not those based on short-term policy reforms but historical performance), all prescriptions will be worse than the desease.
i really do like it.......2007-06-16
if you think about how stinjy (stingy) the 1st world is, it makes you sad. but if you read this book, you'll at least realize that something can be done. hopefully it'll make you feel a little bit better ^_^
Book Description
Economics of Development is renowned for its accessibility and emphasis on the real-world perspectives of developing countries, using concrete empirical data and case studies to illustrate key concepts. Integrating new coverage of modern growth and human resources theory throughout and with five entirely new chapters, the Sixth Edition represents the most extensive revision of this classic text to date.
Customer Reviews:
THE BEST BOOK IN DEVELOPMENT ECONOMICS.......2007-07-04
I have recently had the pleasure to read this book. As a researcher and consultant, I have had the possibility of reading and studying in depth most of the books, papers, and so on, published on Development but I am sincere when I say to my colleagues that I have never read anything like this book, through which Professors Perkins, Radelet and Lindauer are able to explain for Undergraduate students (and anyone interested in this field) the basics (and not so basics) of Development and Economic Growth, forgetting about showing off and focusing just on transferring their knowledge to their students / readers. If I had to describe the book in one word, I would it is just "amazing" and, as it can be inferred from my words, I strongly recommend this book.
The book I've been looking for for a long time.......2007-05-13
This is a well-organized, straight-forward, and informative introduction to development economics. The book has obviously been edited and polished so as to deliver information to the student in the most efficient way possible. Also, this book is so interesting that it is a joy to read. I cannot say that about very many textbooks.
Book Description
The world's most exciting, fastest-growing new market? It's where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense entrepreneurial capabilities and buying power. You can learn how to serve them and help millions of the world's poorest people escape poverty.
It is being done-profitably. Whether you're a business leader or an anti-poverty activist, business guru Prahalad shows why you can't afford to ignore "Bottom of the Pyramid" (BOP) markets.
In the book and accompanying CD videos, Prahalad presents...
Why what you know about BOP markets is wrong A world of surprises-from spending patterns to distribution and marketing
Unlocking the "poverty penalty"
The most enduring contributions your company can make Delivering dignity, empowerment, and choice-not just products
Corporations and BOP entrepreneurs Profiting together from an inclusive new capitalism
"C. K. Prahalad argues that companies must revolutionize how they dobusiness in developing countries if both sides of that economic equation areto prosper. Drawing on a wealth of case studies, his compelling new bookoffers an intriguing blueprint for how to fight poverty with profitability." Bill Gates, Chairman and Chief Software Architect,Microsoft
"The Bottom of the Pyramid belongs at the top of the reading list forbusiness people, academics, and experts pursuing the elusive goal ofsustainable growth in the developing world. C. K. Prahalad writes withuncommon insight about consumer needs in poor societies andopportunities for the private sector to serve important public purposes whileenhancing its own bottom line. If you are looking for fresh thinking aboutemerging markets, your search is ended. This is the book for you." Madeleine K. Albright, Former U.S. Secretary of State
"Prahalad challenges readers to re-evaluate their pre-conceived notionsabout the commercial opportunities in serving the relatively poor nations ofthe world. The Bottom of the Pyramid highlights the way to commercialsuccess and societal improvement--but only if the developed worldreconceives the way it delivers products and services to the developingworld." Christopher Rodrigues, CEO, Visa International
"An important and insightful work showing persuasively how the privatesector can be put at the center of development, not just as a rhetoricalflourish but as a real engine of jobs and services for the poor." Mark Malloch Brown, Administrator, United Nations Development Programme
Customer Reviews:
Saving the World.......2007-10-02
The author loves his TLA's (3 letter acronyms)! I wish someone had told me how technical this book was; those with an MBA will get the most out of it. But I love Prahalad's outlook and creativity. Perhaps with a little advice I can take my ideas and come up with a formal business plan.
Extraordinary claims require extraordinary evidence, and anecdotal evidence is not proof.......2007-06-24
Last year this book became a best seller hit among the developmental community at Washington, D.C., to the point that all bookstores at Metro DC run out of it. With notorious and well publicized praising comments from Madeleine Albright, Bill Gates and the like, I bought it too, but just to discover all the frenzy was undeserved from the viewpoint of poverty eradication.
Undoubtedly Mr. Pralhad's research demonstrates there are plenty of opportunities to do good business among the poor at the BOP (bottom of the pyramid), for them to benefit from the products and services not available now, and for some of them to go out of poverty by becoming entrepreneurs (market penetration is always limited). I agree on these conclusions, as commented extensively by the previous reviewers, and without a doubt this book will become a reference in many Business Schools. But to assert that this strategy will eradicate poverty and bring development is plain sophistry. As Carl Sagan said "Extraordinary claims require extraordinary evidence".
Why sophistry? Regarding the poverty eradication claimed by Mr. Prahalad I will try to highlight some of the main flaws in his rationale and lack of sufficient evidence:
1. Despite the consideration of several cases from around the Third-World, most of the discussion and arguments to build the framework are related to India, excessively. The conditions of the poor in Latin America are quite different, and often, they have better public services available to them. On the other hand, many African countries have worst conditions. So you can not reach valid conclusions based solely on a country with such unique cultural and ethnical conditions. For doing business the cases are fine, especially for India or China because they are such huge markets at the BOP.
2. Wealth creation is hugely overestimated. Poor entrepreneurs and their immediate family will undoubtedly benefit from these new economic activities, but the framework lacks an explanation about how these oases of welcomed capitalism will trickle-down to the rest of their neighbors and poor villages. The implicit assumption is that everybody at the BOP has to become an entrepreneur for this strategy to work, because by just having access to affordable consumer products it seems very unlikely that poverty will be eradicated. The proposed framework is just good for doing business and for the poor to have access to new services and products, but where is the sustainable "fishing industry" for the rest of the poor population? The cases are very unique, islands of excellence, and with limited potential for a population the huge size of the BOT to bail out of poverty in significant numbers.
3. The analysis lacks the historical, cultural, legal and socio-economical background for a given country or region, and this consideration is fundamental for a proper analysis on sustainable development. Even when Mr. Pralhalad correctly identifies lack of education, corruption and the size of the informal sector as barriers for development and doing business, he then oversimplifies a lot on how to overcome these key issues, and again, an isolated Indian case is used as the magic formula to solve the problem through information technology. In fact, at the end of Chapter 6, within the conclusions, he recognizes that the illustrations he provides "are but islands of excellence in a sea of deprivation and helplessness". As the development community knows well, these successful stories are very hard to replicate. In Latin America we have the outstanding cases of Chile, Uruguay and Costa Rica. In Brazil, we have the cases of the Southern states of Santa Catarina, Paraná, São Paulo and Rio Grande do Sul. All of them very developed as compared to their neighbors (in terms of income, education, health, etc.), but despite all efforts, no one has successfully reproduced these islands of excellence at a scale that makes a difference.
4. An example will help to understand how superficial the cases are from a point of view of development and poverty eradication. The Brazilian case of "Casas Bahia" lacks the consideration of the socio-economic environment of the country, especially the case omits to mention key characteristics of the financial and credit markets (for those interested in this particular case from the point of view of business, I recommend you read "Samuel Klein e Casas Bahia: Uma trajetoria de Sucesso", Novo Seculo, 2005, this is a real and really impressive business success story). Mr. Klein successfully, by trusting the poor, built an empire that today is still one of the few option many mid- and low-income families have to buy the first computer for their children going to college in Brazil. But, let's see why the market share for credit cards is only 4%, and why it is not a real threat for Casas Bahia own financial system as stated in the book, as well as why there is not much in here to help eradicat poverty in Brazil. Annual inflation today in Brazil is in the order of 3-4%, and the Brazilian currency, the "Real" have been steadily revaluating against the dollar for the last 3 years. However, interest rates in Brazil are sky-high, a legacy of the hyper-inflation times of twenty years ago. Interest rates for well-known international credit cards are 9-11% per month, which compounded translates to an annual rate close to 180%, regardless of whether you're poor or rich. Today retail chain stores of this type charge around 3% per month, embedded in the price of the consumer products, so the consumer doesn't know up-front the real price. This translates to a compounded rate of 43% per year. Often if you try to pay upfront, there is no discount. So where is the real benefit for the poor? Or are they just getting every day more indebted, and spending money on fat interests that they could have used to buy more or better food or better health services for their kids. I do not see where poverty eradication fits in this case. Obviously Brazil has a problem of lack of real competition in the capitalist sense; even the branches of American Banks doing business in Brazil charge these exorbitant rates. As a reference for the readers, you can buy a 30Gb iPod in Brazil for the "reasonable" amount of US$1,000, payable in 12 installments, and for the high price we also have to thank the federal government high taxes on almost everything. Coming back to the case, as an additional "benefit", you only can make the payments in person at stores of the retail chain, just to make sure the poor are tempted every month and come back for more when they are close to payback that debt. That's why there is a 77% of clients who make reapeat purchases as the book reports. Not surprisingly the case description mentions the criticism "that Casas Bahia simply exploits the poor and charges them exorbitant interest rates", but neglects to present a due explanation of why this is not truth, and simply disregards the cristicism.
5. Finally, Mr. Prahalad is extremely optimistic. At he end of Chapter 6 and in his own words: "I have no doubt that the elimination of poverty and deprivation is possible by 2020". This prophecy speaks by itself about the reliability of the analysis. And again, let's remember that extraordinary claims require extraordinary evidence. All the book presents is anecdotal evidence, which is not proof as any scientist knows, and the framework presented has no predictive power, much less to assert that poverty will end by 2020.
Unquestionably an excellent business book, and a very innovative one, but just for that, business. That's why to me it only deserves 3 stars. On the other hand, not much value-added in there for doing real sustainable development across the board, as the author insinuates and some of the readers think, and certainly not much for real poverty eradication. For that outrageous addition to the book's title I took the other 2 stars. The "Erradicating poverty through profits" part of the book's title should be erased, so the book really deserves the 5 stars most reviewers gave to it (and as the previous reviewer rightly complained, the cases were really awfully edited for the paperback edition, even with repeated sentences). Definitely this book is not recommended if you are serious about new ideas for sustainable development. For a real book on that subject, read the recently publicated "The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It" by Paul Collier, though its scope refers mainly to very poor African countries, it is an example of a serious and proper approach to the problem of eradicating poverty. To understand the complexities of promoting development, you may also read "Making Globalization Work" by Joseph Stiglitz. These two books will clearly ilustrate why "The Fortune at the BOP" is not a book on development, and absolutely, no Nobel Prize is deserved.
Hardcover and tradepaperback are different!!!.......2007-04-13
Here is a note I sent to the editor after buying the tradepaperback version.
Your editorial staff has done something so dumb I am astounded! (Also really $%^& mad.) The hardcover and trade paperback versions of CK Prahalad - The fortune at the bottom of the pyramid, are NOT the same. I assigned readings from this book to my class of 100 students. They went and bought the book and found that the case studies aren't there. On closer investigation I see that you shortened the case studies and renamed the chapters. Unfortunately the editing on the shortening is terrible and I simply can't ask my students to read such badly written material.
You did several things wrong
1) You sell two books with identical titles and covers, which have different content
2) You edited very very badly
3) You did this on an award winning book with high visibility
As far as I can tell there is no way for anyone to figure out that the content is different except in the very rare case that they own both versions.
This is a black mark on the Wharton name. What were you thinking?
-james
at last a pragmatic approach to develpment.......2007-01-09
Prahalad'book "the fortune at the bottom of the pyramid" demonstrates the importance to get the people we are "supposed" to help to get involved. The bottom up approach is in line with William Shaffeerly and David Bornstein books where the people are key to any lasting development. The top down approach a la Jeffrey Sacks are fine for the politicians but did not bring much results after all these years. It is time for a change in approach and the Nobel Price to Dr. M.Yunus is very encouraging.
Magical .......2006-08-29
FBP is an intriguing concept and the model can be scaled up or down in size in all parts of the world. The book serves as a wake up call to businessmen across the world.
Book Description
This book explores political, economic, and social issues common to diverse Third World countries. It stresses the themes of democratization, modernization, and dependency theory, examining the nature of underdevelopment. The text analyzes the major political and socio economic rifts that divide many of these nations and the efforts being made to understand and address these challenges.
Customer Reviews:
Poor writing and lacks originality.......2007-06-28
This is an extremely dry book. There are no maps (which is hard to believe for a political science book/text) and the charts Handelman uses are irrelevant. The writing style is frustrating to follow. Every section is out of chronological order.
My biggest peeve of this book is that Handelman doesn't provide his own research. He basically paraphrases other works and combined them all into a book. Its a cop out way of writing a political science book. None of his ideas are his and he lacks critical analysis necessary for a good political science text.
For example, Handelmann associates modernization with westernization however this isn't necessarily accurate. Many countries modernize without westernizing. To be fair, many of these same countries do absorb few western qualities but after the initial modernization process, they shed any western values. In fact, this produces a sharper anti-western sentiment as these modernized countries believe that westernization is not a necessary component of modernization. Handelmann does not distinguish between modernization and westernization- it is too favorable an argument that lacks critical analysis. Basically, Handelmann is one lazy dude trying to make a quick buck! Don't buy this book. I had it for a political science course and I wanted to throw it in the trask after reading every chapter. If you have to read it for a course then critically analyze Handelmann's arguments because they are all flawed- bonus participation points~
Enlightening........2006-08-20
This was my text for an undergraduate sociology course. Handelman did an exceptional job in presenting the multiple inter-related facets that complicate the development of Third World nations. I would recommend this book to anyone who wants to understand the plight of these countries. My only disappointment was his underlyng premise that democracy is the answer. I suspect that is the belief in most of Western society. However, I am not convinced.
to better the understand the third world.......2002-11-20
Handelman provides what the third world has to deal with to become industrialized democracies. He foucses on underdevelopment, democratic changes. religion and politics, ethnic conflict, women in development, agrarian reform, and rapid uranization among other topics. THe book was published recently so it even has some information about 9-11 and its impact.
Good source for third world development.
Great Textbook and Resource Tool.......2002-04-14
I had to read this book for an undergraduate course on the politics of the developing world. It can be difficult to read at times if the reader does not have some understanding of the developing world or the theories that surround their slow development into modernity. Overall it is an wonderful text for building a knowledge base and an excelllent reference tool.
Customer Reviews:
Very illuminating.......2007-09-23
This book talks about many issues on economic development, and it also includes alternative approaches. You do not have to be a economics major to understand that book.
Book Description
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 book 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. Written in an accessible, at times irreverent, style, Easterly’s book combines modern growth theory with anecdotes from his fieldwork for the World Bank.
Customer Reviews:
Yes indeed "People respond to incentives".......2007-06-19
Unlike Jeffrey Sachs in "The end of Poverty," who calls for a large-scale investment in the Third World countries and paying only scant attention to the importance of prior government commitment and endogenous (indigenous) policy reforms, Dr. Easterly strongly emphasizes domestic variables in shaping growth. His book highlights why growth have failed in most developing countries:"people respond to incentives." It is a must for anyone trying to understand the multidimensionality of growth. Orthodox elixirs have their limits....
Very interesting easy to read, light on solutions.......2007-04-21
Easterly's book in general does a very good job at simplifying the economic language and is easily accessible to all readers. The book also flows well and is an interesting read. He does a good job at describing and analyzing the problems with various economic growth policies. However, his solutions and paths to move forward are vague and simplified.
Elusive Fantasies on Global Prosperity.......2007-04-20
The persistence of poverty and underdevelopment in African countries after the independence of these countries might lead one to reevaluate the validity of the entire discipline of development studies. William Easterly does so from an institutional point of view. He argues that African countries' failure was partly a result of fictitious "panaceas". Albeit a bit more comprehensive, Easterly's method is not very different from the panaceas that failed, however: It is technology, stupid, not machines (p. 51).
Easterly argues that panaceas such as international aid, investment, education, and population control failed because they were not panaceas in the first place. He adamantly tries to show that there is no historical or statistical relationship between these "panaceas" and economic growth. His second argument as to why these methods failed to result in economic development is that they were not coupled with "right incentives". According to Easterly, governments, donors, and individuals respond to incentives; therefore, policies that do not create any incentives for either of these three are doomed to fail. Other than these policy issues, Easterly views technological advancement as the most concrete factor that determines the development of countries. Thus, rather than investment in machines, Easterly prescribes for poor countries investment in R & D. Given the absence of incentives for private parties to invest in R & D in poor countries, he suggests that the governments of poor countries should subsidize investment in new knowledge (p. 168).
Problems, Problems, Problems...
Putting the "people respond to incentives" motto aside, there are two primary problems in Easterly's evaluation of "panaceas". The first one is that he incorrectly discredits the crucial elements of development. To start with, Easterly believes that increases in investments -or machines- has no theoretical or empirical relationship with growth. However, we know no country that has developed without an increase in savings, investments, and machines. (Indeed, for Stiglitz, the East Asian "miracle" was simply a result of saving heavily and investing well). As such, the relationship between machines and economic growth needs a clarification: machines are necessary, though not sufficient, element of an economic growth. Yet Easterly does not think that machines are even a necessary component of growth. Testing this necessary argument, he finds that high rates of investments are not related to high rates of economic growth. The problem with Easterly's test, however, is that it is based on the assumption of a linear relationship between increases in the number of machines and economic growth. Yet no one would argue that "the more machines, the more growth" relationship holds forever. "Machinization" is not immune to the law of diminishing returns. The first couple machines increase the output enormously, later ones increase output less, and later ones more less, so much so that after a point increases in machines virtually decreases productivity because the return from investment in machines does not even matches its costs. Thus, in the absence of an improvement in technology, the relationship between the number of machines and growth is either log linear or curvilinear (`n' shape). (The classic case of high output growth without much productivity growth was that of the Soviet Union in the 1950s and early 1960s. Soviet economy was growing only because of massive mobilization of labor and huge rates of investment and total productivity was growing slowly, if at all. This implied that the growth had to slow down first, and die down later. This is indeed what happened.) For this reason, the relationship between machines and technology is a complementary one. Machines start economic growth and technological advancements maintain and further it. I do not understand therefore why Easterly mystifies the importance of technology for developing countries and downplays the equal importance of investment in machines for these countries. After al technology is applied on machines; or in other words, technological advancement means improvement of machines.
Education has long been treated as another "necessary but not sufficient" element of economic development. Easterly counters this argument as well. He argues that there is no empirical evidence for the positive relationship between investment in formal schooling and growth rates. His argument is based upon primary and secondary level education, however. I do not think that Easterly would still find a nonexistent relationship between post-high school education and growth. What is important here is that investment in technology, which Easterly views as the crucial element in growth, cannot take place without substantial investment in upper level education. In such a case, developing countries will continuously have to import their scientists and engineers from the developed world, which would perpetuate their dependence on rich countries. (Is it just a coincidence that the four Asian countries that have maintained astonishing levels of economic growth in the second half of the 20th century (Japan, Korea, Taiwan, and China) are also the top four countries that send most students to American universities?)
Finally, Easterly's conclusion on the irrelevance of population growth to economic growth is based on his incorrect interpretation of the historical relationship between the two. He argues that historically population growth and economic growth followed the same pattern in industrialized nations: both were slow until the 19th century, and then both accelerated at the same time. Thus, "it is hard to reconcile this fact with the idea that population growth is disastrous to growth," (p. 92). But the parallel trends in population and economic growth in the 19th-century Europe was simply due to economic growth's positive impact on social health. Economic growth meant less infant deaths, less diseases, and more disease treatment. This is exactly the case in today's poor countries. Therefore, the reason why economic growth and population increase go hand in hand in poor nations is not that population increase helps economic growth, but rather that economic growth causes population growth by reducing deaths due to curable diseases. (Interestingly, in the introduction of the book Easterly articulates why economic growth is important for poor countries: "Poverty is not just low GDP; it is dying babies, starving children, and oppression of women and the downtrodden," (p. 15). I do not understand, therefore, why he fails to see that this is exactly why economic growth in poor societies has a population-increasing effect.) To me, population growth is detrimental to economic growth especially for countries that has low capital-to-labor and land-to-labor ratios. Population growth may not be harmful for nations who has high capital-to-labor ratio (e.g. Belgium) because they have enough resources to invest on each additional individual. Similarly, population growth might not be necessarily detrimental for countries with a relatively high land-to-labor ratio (e.g. Brazil), for they can employ new members at least in the agricultural sector. But for a country like Bangladesh, which has low capital-to-labor as well as low land-to-labor ratio, population growth harms growth in two ways. First, it increases the number of mouths that are to be fed with the scarce capital; second, it depresses the wage down by increasing demand for the already scarce jobs.
I agree with Easterly that none of these factors are "panaceas"; nevertheless, they are essential elements of growth policies in developing countries.
To me, the fundamental problem in Easterly's approach to economic development is his misreading of history and his failure to understand the dynamics of a capitalist growth. Easterly attributes rich countries' richness to their technological advancement and implementing right governmental policies. This approach has two inexcusable problems: first, it assumes that all countries can be rich if they employ right policies; second, it assumes that development is a national phenomenon. Like most economic liberals, Easterly shares Rostow's (1959) naïve belief that development has a path to be followed and "any and every" country that follows this path will become a rich country. This argument is simply against the scarcity of vital resources of the world. Today each inhabitant of the North consumes ten times as much energy, nineteen times as much aluminum, fourteen times as much paper, and thirteen times as much iron and steel as someone in the South. Thus, it would take ten planets the size of this one for poor countries to consume as much as rich ones do (Galeano 2000, p. 216). Given the scarcity of vital resources, what poor nations can achieve at most is to alleviate (or maybe eliminate) poverty, not to get rich. And even this cannot be done with their own efforts solely.
A related problem in Easterly's approach is its negligence of the relationship between economic and political power in the world (well, according to Gilpin, this is a common problem among economists). Thanks to its richness, the West (led by the US) enjoys economic, political, and military hegemony over the rest of the world. Any threat to this hegemony will preoccupy the Western countries. The US has already started to preoccupy with the Chinese economic growth, even though Chinese GDP per capita is still around $1000 only. How would be the power relations in a world in which Brazil, India, Nigeria, Indonesia, and China had GDP per capita levels above $10000? Would the powerful countries of the world welcome such a world? Interestingly, Easterly fails to apply his motto onto world politics: What "incentives" does G-7 have in the enrichment of poor countries?
Great Themes and Practical Views.......2007-01-12
I was impressed with Easterly's objective viewpoint as well as his clarity of expressive economic ideas. It was great to read about historical progress on the poverty of nations and what ideas have not worked in the past. It is a great broad overview and it is presented in a very orderly and easy to understand way. I was entertained as I read as well with his personal experiences, metaphors and humor.
It is a good educational read.
Fresh Approach.......2006-11-03
The setting and structure are atypical and a sense of humor is added for enjoyable reading. More important there is an element of hope for the dismal science.
Book Description
In this vital book, visionary international investment manager Antoine van Agtmael -- the pioneer who coined the term "emerging markets" -- pulls back the curtain on the new powerhouses of the world economy. Picking up where Thomas Friedman's The World Is Flat left off, he persuasively demonstrates that the world's center of gravity is already tipping decisively in favor of the emerging economies. With this seismic shift, competitive challenges and investment risks are also being dramatically transformed, while new opportunities are arising for those who are alert to them.
A new breed of world-leading companies are catching their Western competitors off guard. Household names of today -- IBM, Ford, Sony, and Shell -- are in danger of becoming has-beens as these more innovative new superstars in the emerging markets claim dominance. Understanding how they have become world-class market leaders, and where they are taking the world economy, is crucial to understanding not only the future of globalization, but the future of Western competitiveness.
Each year we are buying more planes from Brazil's Embraer, refrigerators from China's Haier appliance maker, smart cell phones from Taiwan's HTC, and gas from Russia's Gazprom. How have these relative unknowns come so far in the world markets so fast? What are they doing right that their Western competitors are doing wrong, and how can Western companies face the intensifying challenges and survive?
With in-depth, inside knowledge of these emerging powerhouses that's based on his thirty years of working, traveling, and investing in emerging markets and his extraordinary access to the leading companies, van Agtmael trains his experienced analyst's eye on twenty-five of the top emerging giants, taking readers into the executive suites and labs where they are outmaneuvering their Western rivals. Profiling these major players, such as Korea's Samsung Electronics, China's computer maker Lenovo, Brazil's iron ore giant CVRD, and India's Infosys, van Agtmael divulges their strategies for growth, and analyzes how their rise to dominance will change our lives. His unique insights point the way to how we in the West can capitalize on the opportunities these companies represent while also mobilizing a powerful response to the challenges they present.
The Emerging Markets Century is a compelling and necessary read for anyone who wants to understand the true magnitude of change under way in the global economy today.
Customer Reviews:
The update on opportune investments from emerging economies.......2007-09-05
In 1981, fund manager Antoine van Agtmael created the term "emerging markets," as opposed to "Third World," to describe developing countries, from Brazil to China. A pioneer in emerging-market investments, he describes the economic revolution being provoked by corporate activities in emerging markets. Van Agtmael enumerates the forces driving this transformation in the economic relationship between developed nations and their emerging-market counterparts. In the second half of the book, he shares his detailed research into the factors that make emerging-market companies notable and successful. He catalogues market details about 25 specific companies he has analyzed for investment purposes, and presents the lessons they can teach Western managers. We recommend this book to serious investors who want to know about promising non-U.S. companies, and to managers who want to read about their corporations' upcoming competitors - and potential future owners.
Refreshing, easy to read, very informative, empowering book.......2007-03-17
This book is poorly branded in my opinion, just like what is said about the authors original idea on Emerging markets vs. 3rd world.
This book is totally under rated, and under subscribed., do yourself a favour and open it up and read a few random pages, you will soon realize how clearly the book is written, and how compelling and refreshing the ideas are that are presented.
This should/could be a best seller in weeks, but has not been promoted effectively in my opinion.
Antoine, whats with the poor branding again ? You need a new cover design, and maybe new title. Go onto CNBC TV also. Your book is incredible but people won't pick it up based on its visual appearance.
Book Description
Bangladeshi villagers sharing cell phones helped build what is now a thriving company with more than $200 million in annual profits. But what is the lesson for the rest of the world? This is a question author Nicholas P. Sullivan addresses in his tale of a new kind of entrepreneur, Iqbal Quadir, the visionary and catalyst behind the creation of GrameenPhone in Bangladesh.
GrameenPhone—a partnership between Norway's Telenor and Grameen Bank, co-winner of the 2006 Nobel Peace Prize—defines a new approach to building business opportunities in the developing world. You Can Hear Me Now offers a compelling account of what Sullivan calls the "external combustion engine"—a combination of forces that is sparking economic growth and lifting people out of poverty in countries long dominated by aid-dependent governments. The "engine" comprises three forces: information technology, imported by native entrepreneurs trained in the West, backed by foreign investors.
Customer Reviews:
For the masses.......2007-06-20
You Can Hear Me Now will interest a wide variety of readers. On a personal level, the story of Iqbal Quadir, who at age 36, single-handedly coordinated the effort to bring cellular phone service to one of the poorest countries in our world, is an inspriration. Moving beyond the completion of his college studies in America and entering the workforce, Quadir had not forgotten the struggles of the rural poor of his homeland, Bangladesh. Iqbal Quadir's story is one of creativity, passion, and perseverance not only for a project, but for a people. Beyond the book, the story grows. Readers can expect Mr. Quadir will continue to work toward the alleviation of poverty in Bangladesh through continued efforts with new projects.
As an academic book, readers will discover a revolutionary economist in Quadir. He has used traditional economic theories to develop, solidify, and test his own. He is a noted original thinker and a man of action. "Connectivity is productivity" is Quadir's cry. He is changing the world's view of the risk of investment in developing countries. He is a victor of the race to end poverty.
Mr. Sullivan's well-written references to and explanations of economic concepts are clearly written and easy to understand. This book is a must-read for all students of economics, business, and entrepreneurship. If instructors do not require the book, students should be delving into the material on their free time.
Globally, the impact of Quadir's work in Bangladesh has rippled throughout the developing world with his economic practices and business models duplicated successfully. Iqbal Quadir's story brings hope for a better future for millions of people, and personally, his actions inspire me to question what role I play.
Worth it!.......2007-03-14
It is a story about a man with a vision to empower the poor in Bangladesh (one of the 50 poorest countries in the world according to many global economic reports). Iqbal Quadir had faith in his strategy and the intelligence to lay it in ways to get investment from Grameen Bank and other powerful investors, who may have once been reluctant. If you already have grassroots business ideas, this book is not only an inspiration but it also loosely illustrates the challenges in BOP markets.
Wonderful example of thinking outside our cultural constraints..........2007-02-25
To the typical American (and other developed nation citizens), the cell phone has become part of the normal fabric of life. Communication with anyone at any time from anywhere is just expected. But in countries like Bangladesh, only a very small number of people have access to any type of telephone communication. The book You Can Hear Me Now: How Microloans and Cell Phones are Connecting the World's Poor to the Global Economy by Nicholas P. Sullivan does an excellent job of showing how something as simple as the cell phone can break the cycle of poverty and aid for millions of people.
Contents:
Part 1 - The GrameenPhone Story: Connectivity Is Productivity; Dish-Wallahs of Delhi (and Other Early Models); Cell Phone as Cow - A New Paradigm in Search of Investors; On The Money Trail in Scandinavia; Building a Company; Building a Network
Part 2 - Transformation Through Technology: Wildfile at the Bottom of the Pyramid; Cell Phone as Wallet; Wealth Creation and Rural Income Opportunities; Beyond Phones - In Search of a New "Cow"; Eyeing the Dhaka Stock Exchange
Epilogue; Notes; Resources; Index
The book is split into two parts. The first part covers the story of GrameenPhone's launch in Bangladesh, and the second part is more of a look at the forces behind using technology at the "bottom of the pyramid" (the vast number of people who globally live at poverty level) to connect them to the world's trade economy. Iqbal Quadir was a Bangladeshi who studied and worked in the US and was doing quite well. But he was also concerned about the massive levels of poverty in his home country. Once day he was standing on the street and had an epiphany about communication equaling productivity. His people worked hard, but they had no way to reliably communicate with others except by face to face meetings. All that wasted time meant there was untapped potential just waiting to be utilized. He started talking with Muhammad Yunus, founder of Grameen Bank (originator of microloan programs) to see how communication technology could be rolled out to the entire country, making a phone available to anyone near a village. Without government aids and grants, Quadir put together a consortium of foreign investors and Grameen Bank to build GrameenPhone, a life-altering company. Using a fiber-optic line already laid next to the country's rail line, they were able to place cell towers in areas to cover all the rural areas of Bangladesh. Then using microloans from Grameen Bank, "phone ladies" could buy a cell phone for the village, offer the phone service, and sell the time in small increments. The cell phone gave a business to the village, in addition to creating subsidiary jobs and opportunities with the communication that was enabled by having phone service throughout the country. It's this use of technology that's advocated in the second part of the book as an example of how business opportunities can remove the grip of poverty from nations and lead to living wages instead of handouts.
You Can Hear Me Now is an inspirational book with plenty of lessons for those who are willing to look outside the normal constraints of what we consider business opportunities.
An excellent book that shows how ICTs are effective development tools..........2007-01-29
This is a well-written, well-researched book that clarifies the substantial role that ICTs are playing in developing countries. It showcases Iqbal Quadir, who founded GrameenPhone in Bangladesh, and shows how he risked his investment banking career on Wall Street to go back to his native country to improve it. There is a lesson here not just for US/EU immigrants from poor countries, but for everyone interested in developmental economics and aiding poor countries: charity is not the only way. In fact, as the World Bank conceded, its efforts at poverty alleviation are failing. This book shows how GrameenPhone, a company that generates profit and is majority-owned by a European telecommunications company, is a positive force for improving Bangladesh. It has provided cell phone service, where no telephones existed. It has created jobs and made the entire economy more efficient. Indirectly, it has empowered the masses and connected them to the global village.
For readers with an interest in Grameen Bank, Professor Yunus (2006 Nobel Peace Prize), telecommunications, but also entrepreneurship, I think you will find that this book is a must-read. Also, for those following the Jeffrey Sachs, Bono, Bill Gates, UN Millennium Goals, Stiglitz, Easterly debate this is also very relevant. I hope that Mr. Sullivan follows this book up with another one that showcases how innovative men and women like Quadir can change the world and also make a profit for investors (which encourages them to continue to invest in developing countries).
After reading this book, I bought several copies for people I know in Business School, because I think it will inspire them to be successful and also think about how to improve economic opportunity in the developing world, through bottom-up entrepreneurship.
Book Description
Adopted at more than 400 colleges and universities worldwide, Economics of Development remains the standard of excellence in its market. That tradition continues with this Fifth Edition in which the all-star team of authors, including newcomer Steven Radelet, introduce a number of important improvements to the book's scope and coverage. Like previous editions, this one benefits from the wide-ranging expertise of its authors, both as researchers and field practitioners, and its approach remains steadfastly pragmatic and authoritative. Now more than ever before, Economics of Development is the book to count on in your development course.
Customer Reviews:
If you are only going to read one Economics textbook in your life..........2006-01-20
This book, although extremely long, wastes no space in its presentation. Of all economic textbooks I have encountered, this is the only one that explains clearly and precisely everything about world development, citing failed and successful examples in history. If you ever wondered what the driving forces behind policies in the world were, you need this book. Priceless.
Excellent book.......2001-09-22
This is one of the best books in economic development ever published. Written in plain english, so it's easy to understand, even for non-economics students. Highly recommended for graduate students, professors, and professionals interested in economic issues of developing countries.
Excellent ... But ... !!!.......1999-08-21
This is an excellent academic book ,but it needs updating in light of the recent global developments. Basically it is missing a detailed analysis of The spread and effects of Globalization. Maybe there is a new edition in print now ???
Book Description
Policy makers in the developing world are grappling with new dilemmas created by openness to trade and capital flows. What role, if any, remains for the state in promoting industrialization? Does openness worsen inequality, and if so, what can be done about it? What is the best way to handle turbulence from the world economy, especially the fickleness of international capital flows?
In The New Global Economy and Developing Countries Dani Rodrik argues that successful integration into the world economy requires a complementary set of policies and institutions at home. Policy makers must reinforce their external strategy of liberalization with an internal strategy that gives the state substantial responsibility in building physical and human capital and mediating social conflicts.
Customer Reviews:
Lessons for Policy Makers.......2000-05-04
In this book, Danny Rodrik offers some valuable guidance for policy-makers. They should focus on the fundamentals of economic growth - investment, macro-economic stability, human resources and good governance - and not let international economic integration dominate their thinking. The potential benefits of openness will only be realised when "complementary policies and institutions are in place domestically".
An important result from his analysis is that a strong, participatory, democracy is good for growth. This is very much in line with Barro's "Determinants of Economic Growth" (1998).The resoning is that a country with a strong democracy will be better at resolving the social conflicts emerging from external economic shocks, and therefore benefit from greater macroeconomic stability. In order to increase the effectiveness of dealing with shocks, the channels to which non-elites can make themselves heard, and participate, in policy making needs to be improved. Otherwise dissatisfaction will lead to social unrest.To play the role of honest broker, the state needs to perceived as competent and free of corruption.
Two policy areas are identified as being central to achieving long-term growth and making openness work: A domestic investment strategy; the strengthening of domestic institutions of conflict management.
Many of his findings offer support for much of current policy thinking on development. The importance of political freedom, security of person, and the need for a reasonable degree of macroeconomic stability is widely recognised. Good governance has moved firmly up the list of priorities. Also, attempts are being made to try and increase the widespread "ownership" of reforms through e.g. the Comprehensive Development Framework of the World Bank.
However, there are several important areas where Rodrik's analysis requires further consideration:
· Developing countries, in devising a domestic investment strategy, are better advised to look at ways of reducing risk and improving their credibility in the eyes of domestic and foreign investors, rather than following Rodrik's suggestion to improve investment returns through e.g. investment subsidies. (see Moran (1998) "Foreign Direct Investment and Development").
· The strong link between good governance and openness is very important and needs greater attention. Red tape and corruption are strongly correlated. Trade restrictions nearly always introduce distortions, caused by "rent seeking" activities, and create vested interest groups.
· As he suggests, all countries are able to improve their "fundamentals". But it is also true that different regions are likely to benefit from integration - in terms of both growth and poverty reduction - to very different extents.
· Rodrik suggests that Africa is not "different". He is right in so far as domestic factors - stability and security - are central to its success. But sub Saharan Africa is different . It faces great difficulties in building institutions of conflict management and has a legacy of being the most trade and capital hostile region.
· As is always the case in the "never ending question" of empirical tests of the links between trade and growth, the interpretation of the results of his work is very much open to question. He is far from decisively refuting this link.
Taking some of these factors into account suggests that Rodrik's somewhat sanguine attitude to inward-looking developm t is ill advised. Also, the potential role for international governance in helping to overcome several of and the problems facing poorer countries - low credib ity, limited regulatory resources, small markets -becomes more important. But these rules will help in so far as they encourage certainty, transparency and non-discrimination, rather than in offering flexibility. However, as Rodrik states, " these rules of the internation economy must be flexible in order to allow developing countries to develop their own "styles of capitalism"".
Insights into making 'globalization'work for poor countries.......1999-02-20
Like clothes, economic development policies are subject to the trends of fashion. This book examines the current development fad, "openness," and critiques it as a flawed economic model when applied simplistically to developing countries. The author, Dani Rodrik, professor of international political economy at Harvard, is no enemy of an open world economy, but he argues that its boosters greatly oversell its virtues and neglect its vices. He contends that too many governments and their policy advisors are fixated on openness --the unrestricted flow of goods, services, and capital across borders--as an end in itself. The dangers to this approach, he warns, are that: 1) openness alone is an unreliable mechanism to generate and sustain economic growth; 2) it tends to widen income and wealth inequalities within both developed and developing countries; and 3) it exposes countries to external shocks that can trigger domestic conflicts and political upheavals.
A developing country can gain much from openness to trade and investment, he agrees, but it must also do much in actively "making openness work"--the theme of the book. The minuses of openness may outweigh the pluses if a country fails to develop its own internal "complementary policies and institutions." What kind of policies and institutions? He cites these as among the most important: "participatory institutions, civil and political liberties, free labor unions, non-corrupt bureaucracies, high-quality independent judiciaries, and mechanisms of social insurance such as social safety nets." He offers specific evidence on how such institutions are valuable to developing countries for coping with turbulence in the world economy and for countering the widening of inequality that openness often brings. For most economists Rodrik is heretical because he debunks the "free market religion" and derides "knee-jerk globalizers," though only in passing. This is far from a diatribe against globalization. Instead, the book presents a detailed factual case for openness as "part of a development strategy," rather than a substitute for one. His forceful advice to governments and policy advisers: "Stop thinking of international economic integration as an end itself. Developing nations have to engage the world economy on their own terms, not on terms set by global markets or multilateral institutions." A valuable chapter of the book is one titled "Is Africa Is Different?" Rodrik answers No; openness can work its wonders there but (as anywhere) definitely not if applied simplistically.
Rodrik slips into jargon from time to time, but you can still benefit from reading his book even if you don't have a degree in economics.
--Robert A. Senser, editor of the Website Human Rights for Workers
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Policy & Current Events
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The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good
Development as Freedom
Globalization and Its Discontents
Banker to the Poor: Micro-Lending and the Battle Against World Poverty
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
