Numerical Illustration

Economists like to use numerical models because it helps them to calibrate more specifically how much it will cost to accomplish a particular goal, in this case the goal of breaking a poverty trap. Here's a numerical illustration of how the poverty trap works, and though a bit tedious, it show's how financial planning can be used to identify the overall magnitude of official development assistance that will be needed to end poverty. To keep things simple, I use an illustration based entirely on...

Polands Return To Europe

In early 1989, I got a call out of the blue from Krzysztof Krowacki, an official in the Polish embassy in Washington, to ask if he could visit me at my office at Harvard. I agreed. I did not know what it was about, but it would turn out to be an invitation to participate in the epochal events starting to unfold in Eastern Europe. A few days later, Krowacki was in my office explaining the economic disasters that had hit his country, and asking whether the advice I was giving in Latin America...

Launching the Plan

We took the document to Jacek Kuron the next morning. 'Good, this is good, said Kuron. Go see Michnik. Adam Michnik, the Gazeta editor, was the third member of Solidarity's intellectual triumvirate. Brave and visionary, Michnik was as clear thinking as anyone I met in the democratic upheavals of Eastern Europe and the former Soviet Union. I laid out the plan to him. We talked a bit. He kept saying, I'm not an economist. I don't understand these things. At the end of our conversation he asked,...

Money Down The Drain

Secretary of the Treasury Paul O'Neill expressed a common frustration when he remarked about aid for Africa We've spent trillions of dollars on these problems and we have damn near nothing to show for it. O'Neill was no foe of foreign aid. Indeed, he wanted to fix the system so that more U.S. aid could be justified. But he was wrong to believe that vast flows of aid to Africa had been squandered. It is no surprise that there is so little to show for the aid to Africa, because there...