The Elusive Quest for Growth: 8 key ideas
The core ideas of The Elusive Quest for Growth, each in under a minute, written in our own words. Want the full depth? Get the book.
- IDEA 1 OF 8
Many cures for poverty have failed
Easterly, a former World Bank economist, describes how experts repeatedly promised that one big solution would make poor countries grow.
Aid for investment, education, population control, adjustment loans and debt relief were each tried, and none delivered what was promised.
- IDEA 2 OF 8
Investment alone does not create growth
Easterly criticises the financing gap model, which assumed that filling a gap in investment with aid would produce growth.
He shows that many countries received investment money without growing faster.
- IDEA 3 OF 8
Education needs incentives to pay off
Easterly argues that expanding schooling did not automatically boost growth.
If there are few rewards for skills, because of poor policies or corruption, education may not translate into productivity. Skills need a payoff.
- IDEA 4 OF 8
Population control was oversold
Easterly questions the idea that reducing population growth would make countries rich.
He finds the link between population growth and income weaker than claimed. Fewer people did not mean more growth.
- IDEA 5 OF 8
Loans and debt relief disappointed
Easterly describes how structural adjustment loans and debt forgiveness often failed.
Governments sometimes borrowed again or did not make the reforms they promised. Money arrived without lasting change in policy or growth.
- IDEA 6 OF 8
People respond to incentives
Easterly's central message is that people respond to incentives.
Policies work only if they give individuals, businesses and governments reasons to invest, learn and innovate. Ignoring this dooms plans. Incentives are central.
- IDEA 7 OF 8
Governments can block growth
Easterly argues that corrupt or careless governments can destroy growth through high inflation, black markets and poor services.
Good policies matter more than aid. Bad policy can undo any amount of help.
- IDEA 8 OF 8
Luck and knowledge matter too
Easterly notes that growth is partly influenced by luck and by spreading knowledge.
Countries that attract skills and ideas tend to grow faster. Ideas, he says, cluster where they are rewarded.
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