new investments” (p. 63).28
The Report does contain numerous particular policy recommendations that are directly relevant to the conditions of the poor. These include (chapter 5), for example:
Ensuring universal enrollment and completion of primary education through “[a]bolition of school fees and special incentives to get the most marginalized groups into school” (p 85), as well as construction of new schools and the hiring of more teachers.
Raising food productivity of smallholder farmers through a new green revolution in Africa and in bypassed parts of Asia and Latin America, involving private investment to improve water availability and to expand infrastructure and extending knowledge and availability of the most productive technology.
Job creation in manufacturing through expanding urban infrastructure, support for training programs, and favorable tax treatment for investors – especially, it seems, foreign investors.29
IV.B. Barriers to Change
By and large, these are worthy programs – though I would balk at the argument for favorable tax treatment to attract foreign investment (see below). The problem lies, first, in the explanations as to why such programs have yet to be implemented in much of the low-income world. Basically, the Report says that such programs have been lacking because of the poverty trap and because of ignorance. People in poor countries have not had the funds to pursue the necessary programs, and they have been ignorant – government officials, firms, and poor people – regarding the proper policies and the technologies that are needed. As to the alleged ignorance of government officials, for example: “[A]...reason why some [Millennium Development] Goals are not being met is simply that policymakers are unaware of the challenges, unaware of what to do, or neglectful of core public issues.”(p. 45) As to the ignorance of firm managers and of the poor themselves, the Report is replete with invocations to spread knowledge almost as though this were the ‘cure-all’ for poverty.
28 Sachs’ approach in his book (Sachs, 2005), which is very apparent in the Report as well, has been criticized for being unrealistic, made up of “utopian dreams”; see, in particular, the review by Easterly (2005). Not only is foreign aid unlikely to be effective in the way Sachs envisions, but Sachs’ and the Report’s projections of the growth of aid are excessively optimistic – and experience since 2005 has done nothing to suggest the contrary. But the ‘unrealistic’ accusation, as a critique of the analysis, misses the point. These are political documents as much as they are analytic documents. As in many political appeals, the authors seek support by asserting that the task can be done. This may or may not be effective politics, but it should not be allowed to detract attention from the underlying analysis.
29 The argument for favorable tax treatment to attract foreign investment is introduced in Chapter 3, page 47. These three areas – schooling, agricultural technology, and job creation in manufacturing – are only some of the particular policies listed. Other issues of focus include health care, gender bias, capabilities in science and technology, and the environment.