Name: The Elusive Quest for Growth
ISBN: 9780262550420

The Elusive Quest for Growth

Why economists' attempts to help poorer countries improve their economic well-being have failed. 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.

What Hacker News says

airstrikeMay 2026

It's better to not frame this in terms of a specific country, lest it come across as if we're picking on India specifically.

Developing countries have structural reasons for why they are underdeveloped. This is a very complicated topic, and one for which there is no shortage of academic interest. I suggest starting from William Easterly's "The Elusive Quest for Growth".

I quote here from the book review MIT Press:

> What is necessary for growth is that government incentives induce investment in collective goods like education, health, and the rule of law

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f00zzMay 2021

Usually the narrative boils down to the elite (with help from the United States) conspiring to keep the country down. I've been hearing this drivel since elementary school, it's tiresome.

> Also, I don't think Brazil is a special example at all.

Yeah, like most Brazilians I used to think that Brazil was exceptional. The eye-opener was the book "The Elusive Quest for Growth", which describes efforts to bring many countries out of poverty. Most poor countries make similar mistakes, we're not an exception at all.

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tooltalkDec 2018

That was 40 years ago. I read about this movement from William Easterly's Elusive Quest for Growth when I was young, still in college. It changed almost everything I thought I learned about poverty and development economics.

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tooltalkJan 2018

The Elusive Quest for Growth by W. Easterly -- read it when I was in college hoping to study development (poverty, growth) economics; changed the way I look at poverty, economics and politics in general. Likewise I helped me ditch modern liberalism for classical one.

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nickikMay 2017

The problem is just that human capital by itself does not facilitate economic growth. A look at the Soviet Union can show you that as well. The Soviets had a huge well educated population with fantastic mathematicians and everything you need to be successful, but the had almost no growth for 20 years.

I don't know a book specifically focusing on that issue, but any book on the history of economic development should have some discussion on this problem. There are good books both those that are more populist and the more academic ones. There is also the question do you want to focus on Development Economics specifically or general growth theory. One is more about how you can help somebody grow the other is more fundamentally about why growth happens.

I suggest you start view something more broad then just looking into education. A mooc like this: http://www.mruniversity.com/courses/development-economics-0

The list of books are very long. Something like "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics" might be a starter. Once you get into the topic you can go in different direction. I am confident that I will also conclude that education by itself will not lead to sustained development.

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shaddiMar 2011

I'm not going to fault this piece for being hand-wavy and poorly justified: it is that, but then again, it's a piece of popular journalism which is allowed to be. So, I'll criticize the broader idea.

This article cites China as a model. Hong Kong did not pull the rest of China up as it grew. It certainly played a role, but frankly the communism that took resources from the urban coast and built roads, schools, and other infrastructure in rural areas was more likely a bigger contributor to the massive improvement in (purely economic) standard-of-living for most Chinese.

It was in particular /not/ enlightened foreign rule of urban areas that did this. If we accept that all geopolitical entities respond to incentives, it is not clear that direct foreign control of areas of the developing world will produce the ideal outcome for those areas: this will only be the case when the incentives and interests of both the local population (which is not monolithic, btw, but we'll ignore that for now) and the foreigners align; long term prosperity requires that incentives align for both in the long term, which seems terribly unlikely. Moreover, the history of development is fraught with stories stories good-intentioned outsiders failing to make a beneficial impact because they poorly understood the complex local situation, and it's simply unrealistic to assume you can just start with a clean-slate-by-fiat in a "charter city" and build without considering a place's history.

I think Romer has a good core idea, one that few people would argue with. Namely, development is not just a matter of fixing the "Production = F(capital & labor)" equation; good governance, good ideas, and good people all are required. While it may be surprising to some, this is an idea that is pretty well understood (at least at a high level) in the development community/industry. My beef with his idea is a flawed execution, and one that I think could be potentially damaging in the long term. These ideas need to come from local populations and make sense for their own contexts.

As an analogy, you just aren't going to reproduce Silicon Valley by emulating the Bay Area's regulations and investment level: there is a whole history that made it the way it is. Attempts to do so are kind of doomed from the start, so it's better to focus on creating new centers of prosperity that make sense for the local context. I don't think foreigners are well positioned to do that.

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Another point to make, the Millennium Villages Project had a similar premise to Romer's. The idea was that solving the problems of poverty in particular villages through strong international partnerships would lead to spillover effects throughout the surrounding areas. Everything I've heard about it is that the results have been alright, but not really that great. Besides a bit more of a heavy-handed foreign-involvement approach, I'm not sure if the "charter cities" idea really is that different than MVP and hence it's not clear how it will overcome the obstacles MVP faced.

Edit: William Easterly is quoted here. He has an awesome book, "The Elusive Quest for Growth", that discusses a lot of non-intuitive reasons why development efforts have historically failed. I would highly recommend it.

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