William Easterly- The White Man's Burden

Chapter 2

- Legend that gave birth to foreign aid in the 1950s
○ Legend: the poorest countries are in a poverty trap, from which they cannot emerge without an aid-financed Big Push, involving investments and actions to address all constraints to development , after which they will have a take-off into self-sustained growth, and aid will no longer be needed.
- Chapter tests the legend

Legend part two:
- Whenever poor countries have lousy growth, it is because of a poverty trap rather than bad government
- Why does it matter whether it is bad government or a technological poverty trap?
○ Bad government is bad for fund-raising for aid
○ Bad government explains slower growth-- brings country into poverty trap
○ "big Push" not going to work if the problem is bad government rather than poverty trap

Legend part three:
- Foreign aid gives a push to countries to achieve a takeoff into self sustained growth
○ Africa received more than 15% of its income from foreign donors in the 1990s
○ Aid has a positive impact on growth in developing countries with good fiscal, monetary and trade policies but has little effect in the presence of poor countries
○ Small amount of money doesn’t work- need a lot so can fix problems simultaneously
○ NO EVIDENCE THAT AID HAS EFFECT ON GROWTH

The problem of evaluating the white man's burden

Against big push: hard to evaluate