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Sachs’ plan for nations in Africa, where about 45% of the population live in extreme poverty, reflects his general approach to economic rescue. “Clinical economics,” his innovative strategy,
uses the methodology of modern medicine to diagnose and treat ailing economies. Sachs likens the national economy to the human body, describing it as a complex system with myriad potential
sources of failure. He eschews the crude, myopic diagnostic
methods common among International Monetary Fund (IMF) economists advising poor countries, which tend to focus exclusively
on addressing budget deficits and removing obstructions to private investment. “The IMF,” Sachs writes, “has overlooked urgent problems involving poverty traps, agronomy, climate, disease,
transport, gender, and a host of other pathologies that undermine
economic development.” He therefore proposes a "differential diagnosis,” carefully considering each country’s specific problems before seeking a cure, as a doctor would do for a medical ailment.
The End of Poverty includes six case studies of developing
nations that Sachs effectively assisted or is working to assist through differential diagnosis. Sachs has had an impressive career. Throughout the nineties he played a pivotal role in ending hyperinflation
in Latin America and in bringing ex-communist nations into the community of global trade. Arguably, his success stories demonstrate the efficacy of his “clinical practice.” While certain regions of Latin America, Eastern Europe, and Asia still face extreme
poverty, most of their constituent nations have reached what Sachs calls the “first rung” on the economic development ladder: they have joined the international division of labor, and have thus embarked on the road to growth that economists since Adam Smith have extolled as the miraculous reward of capitalism.
Most African nations, however, have not made this important step toward economic development. Sachs suggests these nations are stuck in a “poverty trap.” When a nation lacks the ability to feed its own citizens, it can scarcely hope to accumulate capital for investment. First, Sachs outlines the well-known symptoms of the poverty-trap, including widespread disease, inadequate food production, and “the unmet need for basic transport, electricity, cooking fuels, and communications.” Then his diagnosis begins.
Continued
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Vol. 3 No. 2 Specials |
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Penile Politics and Religion in an HIV-wary India |
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AIDS Funerals in South Africa |
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Rick Warren’s Purpose-Driven Plan |
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An Interview from New Orleans
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Inside South Asia’s Fiercest Slum |
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The Struggle with Modernity |
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A Review of Jeffrey Sachs’
The End of Poverty |
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This virus is of a far different breed. |
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