Encouraging Development

I just finished two excellent books with very different takes on economic development in the developing world: Confessions of an Economic Hit Man by John Perkins and The End of Poverty by Jeffrey Sachs. Both were excellent and made a great pair being read together.

Confessions of an Economic Hit Man is about John Perkins personal experience in the 1970's and 1980's making economic forecasts to help developing countries secure loans from the IMF and World Bank for large-scale projects completed by companies like Halliburton and Bechtel. Basically he was encouraged to lie so that the countries could get gigantic loans that would keep them beholden to the first world. It also helped that Americans got big jobs in the process.

Jeffrey Sachs comes into the picture a bit later in the game. In the mid-1980's, he was asked to help Bolivia solve it's economic problems. He quickly saw that the large loans they had acquired through the IMF and World Bank were crippling them and encouraged them to quit repaying the loans as part of a larger initiative to spur the economy and stop inflation. He went onto urge the same approach in other countries and is working to change the way the first world approaches development in the world's poorest countries.

These books outline two very different approaches to the same issues and shed an interesting light on pivotal issues like the war in Iraq and the root causes of terrorism.