Jeffrey Sachs: evaluation

Transcript context

…I introduce Jeff Sachs; that’s easy. Jeff is one of the world’s best, most famous, and most influential economists. There’s more I could say, but let’s start with that. The purpose of these series is to have conversations that you don’t find other places on YouTube, and to ask probing questions and have a far-ranging dialogue. What I’d like to do is kind of overview of Jeff’s career and thought and try and see how it all hangs together, how the different pieces relate to each other. What I’d like to do is start with some of the early pieces, from the ’80s and 1990s. Then we’ll work our way up to the present. The first question, Jeff, and we’ll treat this as a dialogue. Some of your best-cited work has been on the natural resource curse: the idea that economies, when they have natural resources — such as oil — that can harm their prospects for growth rather than helping them. Now we’re in 2015. How do you see this issue today? Do you think that has changed in any way since the first thesis you wrote? First, let me say thank you for having me. I’m really looking forward to our discussion. About 25 years ago, I started looking more and more at my own work and how economic structure, geography, resource base, and so forth affected development. I’ve been on a learning curve since then. One of the early works that I engaged in at that point with Andrew Warner and others was looking at this question of how resource wealth, resource dependence one could say, affected development. We found back in the 1990s, looking for the preceding 25 years or so, that the oil-rich countries had grown less rapidly, controlling for seemingly other factors that would be relevant. We started to speculate about that. There’s now a huge literature from many different points of view: politics, pure economics, and so forth. It’s a pretty rich subject and not so simple to summarize. There really is a resource curse for a lot of resource-rich countries. At this point, looking back, I would put more weight on the political economy aspects probably than the pure, market-driven “Dutch disease” aspects which I talked about a quarter century ago. The idea at the time was that if you have resource wealth that pulls you away from more labor-intensive and technology-intensive industries. You don’t learn as much. You don’t develop as much endogenous growth. Now I would say if you have resource wealth, one problem is you’re likely to be invaded. You have more vulnerability to geopolitics as well as to internal politics to mess things up. Is this a habit you can kick or is it path dependence? The price of oil now is quite low. Do you think those countries that have a lot of oil, now they’re going to be better off because they’ll be put on this new development path, or is it somehow too late, that they’re stuck with the bad institutions?…

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