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The End of Poverty, Economic Possibilities for Our Time, by Jeffrey D. Sachs

April 24, 2005; New York Times; The End of Poverty: Brother, Can You Spare $195 Billion?; by Daniel W. Drezner.

JEFFREY D. SACHS makes a bold declaration in ''The End of Poverty.'' He argues that if the wealthy countries of the world were to increase their combined foreign aid budgets to between $135 billion and $195 billion for the next decade, and properly allocate that money, extreme global poverty -- defined by the World Bank as an income of less than a dollar a day -- could be eliminated by 2025. Readers should fervently hope that Sachs is correct, and persuasive; the political, economic and ethical returns to improving the plight of 1.1 billion people would be enormous.

Sachs brings a unique background to this issue. He is macroeconomist to the stars -- in the foreword the U2 frontman, Bono, characterizes Sachs as ''my professor.'' A tenured economist at Harvard in the mid-1980's, he stumbled into the developing world by brashly claiming that he could tame Bolivia's hyperinflation. His success at that task led to consulting gigs in Poland and Russia. The experience in Russia did not turn out so well, but for this kind of work a 67 percent success rate borders on the miraculous. Sachs is now the director of the Earth Institute at Columbia University and a special adviser on global poverty to the United Nations secretary general, Kofi Annan.

''The End of Poverty'' is really two books. One consists of Sachs's recollections of his experiences as an adviser to distressed and developing nations. This memoirish part is not terribly gripping. One of the most dramatic passages consists of a Sachs colleague calling him from Warsaw a week after radical reforms were implemented in Poland to say, ''Jeff, there are goods in the stores!''

The heart of the book is Sachs's forceful analysis of the causes of extreme global poverty, his proposed solutions and his peroration on why his plan should be carried out. Boiled down to its essentials, the argument is simple. Too much of the globe is ensnared in a ''poverty trap.'' A combination of poor geography, poor infrastructure and poor health care renders some societies incapable of generating any economic surplus for the future. These places cannot afford investments that would boost their economies over the long term when bare subsistence is the short-term goal.

For about 20 years now, the West's standard refrain has been that market-friendly policies stimulate greater economic growth and in turn reduce poverty. Sachs does not disagree with this view so much as declare it incomplete: ''Market forces, as powerful as they are, have identifiable limitations, including those posed by adverse geography.'' Intuitively, this makes sense; a Kenyan village struggling with AIDS, malaria, inadequate drinking water and a lack of electricity cannot grow out of poverty unless its health care system and physical infrastructure improve.

Sachs says the first step should be to increase foreign aid in a way that would provide a greater return to private investment. Once these investments are made, private entrepreneurs will be earning a greater rate of return on their businesses, triggering market-led economic growth. He details a multidimensional plan for international intervention that goes beyond simple market economics -- involving human capital, business capital, natural capital, public institutional capital, knowledge capital and infrastructure. In these pages Sachs's technocratic enthusiasm bubbles over. At one point he writes that all of the challenges of extreme poverty ''can be met, with known, proven, reliable and appropriate technologies and interventions.'' He makes a powerful case: the kinds of technologies he calls for include fertilizers, cellphones, antiretroviral AIDS drugs and antimalarial bed nets.

For cynics who doubt whether the international community has the will to accomplish such a monumental task, Sachs points out that global efforts on this scale have succeeded in the past: the eradication of smallpox and the Green Revolution in Asia are examples. He also notes that his proposed annual budget is still less than the pledge made by the developed world at the 2002 Monterey Summit to devote 0.7 percent of its gross domestic product to development aid.

Sachs's missionary zeal is infectious, but the flaws in ''The End of Poverty'' should sound important notes of caution. There is, for one thing, the matter of Sachs's ego. Anyone who can write that ''as a young faculty member, I lectured widely to high acclaim, published broadly and was on a rapid academic climb to tenure, which I received in 1983 when I was 28'' clearly lacks the gift of understatement. This faith in his own abilities is what allowed him, as a relative newcomer to development economics, to declare that he had found the answer to extreme global poverty where others who had devoted their lives to it have failed.

However, longtime experts in the field who read this book may feel a strong sense of déj¸ vu. They should. Much of Sachs's argument can be summed up in this passage from Walt W. Rostow's book ''The Stages of Economic Growth,'' written in 1960: ''The creation of the preconditions for takeoff was largely a matter of building social overhead capital -- railways, ports and roads -- and of finding an economic setting in which a shift from agriculture and trade to manufacture was profitable.'' Sachs neglects to mention the extent to which the Rostow model dominated discussions of development in the 1950's, 60's and 70's. But in that era, waste and corruption fattened up United Nations agencies and recipient governments while doing very little for the poor. As the development expert William Easterly has observed, Sachs's sales pitch has been made in the past, and the results were meager.

Elsewhere, Sachs oversells or contradicts his own arguments. On the question of AIDS prevention, for example, he triumphantly cites a recent article to argue against the hypothesis that Africans engage in more sexual activity outside of marriage than is the case in other cultures. Sachs's assertion, while politically correct, is off the mark. The very article he cites goes on to say that because of ''the much higher number of cumulative sexual acts'' outside of wedlock in countries like Uganda, the likelihood of H.I.V. transmission is much greater in Africa. Furthermore, these sexual practices make quick-fix solutions -- like promoting condom use -- much less effective.

Similarly, Sachs dismisses critics who argue that culture is an important factor in explaining poverty even as he concedes that religious and cultural traditions have prevented women from educating themselves, which in turn has slowed development. He acknowledges that governments should not invest in business capital: ''When governments run businesses, they tend to do so for political rather than economic reasons.'' But he fails to consider just how much this dictum applies to everything governments run. His unspoken assumption is that governments as corrupt as Nigeria's or Kenya's would allocate health or education investments in a nonpolitical manner.

Sachs also says things that may alienate potential allies. He shrewdly observes that in the past, support from America's religious right has been crucial for encouraging foreign aid. At the same time he deplores ''irrational biblical prophecy,'' which, he says, ''is terrifying for those of us who would rather use rationality than scriptural prophecy to determine U.S. foreign policy.'' This is hardly the kind of comment calculated to win Christian conservatives to his side.

It's highly unlikely that Sachs's proposals will ever be adopted in full. And yet, is there any other way of spending $150 billion a year that would reduce extreme poverty more effectively? Even if ''The End of Poverty'' is only half right, the payoff would be enormous: more than 500 million people helped. Sachs hasn't found a sure thing. But that doesn't mean his bet should not be made.

Daniel W. Drezner is an assistant professor of political science at the University of Chicago and an advisory board member for the Commitment to Global Development Index.

THE END OF POVERTY Economic Possibilities for Our Time. By Jeffrey D. Sachs. Illustrated. 396 pp. Penguin Press. $27.95.

Copyright 2005 The New York Times Company

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