Sachsy development

This post appeared in Dutch on the Oikocredit Netherlands website.

The logic is irresistible: if we send enough money to developing countries, poverty will be put to an end once and for all. We have got to help, it’s our responsibility. In the book The Idealist, Nina Munk portrays the charismatic Jeffrey Sachs and his Millennium Villages in Africa. How good intentions can have destructive consequences.

Jeffrey Sachs with U2 singer Bono

Already at a young age Jeffrey Sachs (1954) stood out: he received high grades in school, won math competitions, and displayed leadership qualities. He was already a successful economist when the Bolivian president Victor Paz invited him to help Bolivia in the mid-eighties. The country was poor and the economy was in chaos. Inflation reached 25,000%. Sachs wrote a plan for economic recovery. The strict fiscal and monetary policies caused hundreds of thousands of people to lose their job or pension. But the “shock therapy” helped: inflation fell to 15%. As it turned out: the economy is controllable, as long as you are willing to make concessions.

In 1995, Sachs visited Sub-Saharan Africa for the first time. The trip marked the start of his crusade against poverty. In the decade that followed, he travelled all over the world to convince people that a “Big Push” in development aid was needed. According to Sachs, we “have to stop using the M-word and start using the B-word.” In other words, we need billions, not millions to tackle this problem. His new humanitarian image seemed to conflict with the strict policies he promoted in Bolivia. But in one respect he was consistent: as long as we display enough willpower, everything has a solution.

Sachs had reached the status of a rock star by the time he published his book The End of Poverty in 2005. U2 singer Bono called himself Sachs’s “student” and there was even a Sachs fan club. However, Sachs was not content: despite his tireless campaign, the Big Push had failed to come about. If others wouldn’t do it, he would. In 2006, Sachs convinced billionaire George Soros to finance his Millennium Village project. He would use ten African villages to show that poverty can be annihilated by investing enough money. The project was supposed to last five years, but Sachs assured Soros: “Most of the work can be done in just one year. (...) The rest is just footnotes.”   

Sachs was wrong. Munk describes how, initially, the new money improved the situation in the villages. Schools opened up, doctors were attracted by the relatively high salaries, and farmers received better seeds. But poverty is persistent. For example, the maize harvest in the Ugandan village Ruhiira doubled, but the roads were so bad that the surplus could not be traded. The extra harvest was eventually eaten by rats. Once the money influx started to slow down, the recorded improvements appeared unsustainable. Villagers were angry that their expectations had not been met. In one village, they even wrecked a car owned by the Millennium project.

Sachs denies that his project failed; he even calls it a big success. Who is right? That’s the worst: we’ll never know. There were no proper baseline measures collected before the start of the project, nor are there ‘control villages’ with which the Millennium Villages can be compared. Life seems to have improved in some villages, but Africa has been doing well in general. So, in how far can we ascribe progress, if any, to Sachs and his project?

The Idealist shows that a golden charisma, good intentions, and a brilliant mind are not sufficient for success. The main complaint of the villagers was that the project had a top-down approach and that their voices were not heard. Sachs saw the poverty puzzle as a simple calculation: add up the correct interventions and you will get prosperity as the result. But he forgot the most important piece of the puzzle: he forgot to listen to the people that the project was all about.

Want to read or listen more?

• Order the book The Idealist by Nina Munk here.
• Listen here to an interview with Nina Munk. Listen here to an interview with Jeffrey Sachs, responding to the book and, more generally, to critics of the Millennium Villages project (hat tip to Lukasz Marc for both links).