Has Jeffrey Sachs changed his tune...

Brad De Long delong at econ.Berkeley.EDU
Tue Sep 15 09:51:29 PDT 1998



>Re Max's: "All this psychological speculation [about Jeffrey Sachs] is
>quite beside
>the point, if the least bit of his record is known."
>
>I dunno -- going from being the prime architect of economic "shock
>therapy" to an advocate of debt forgiveness

Two separate issues:

"Shock therapy" is a judgment that you need to get from bureaucratic-industrial feudalism to the capitalist mode of production *as*fast*as*possible* because to be stuck in the middle (as Russia is today) is the worst of both worlds.

"Debt forgiveness" is a judgment that first-world creditor attempts to get third-world countries to repay past loans that have gone bad is doing enormous damage to third-world attempts at development.

Both judgments still look to me to be correct: looking at Poland, Russia, Ukraine, and Romania makes me think that shock therapy was the best of a very bad set of options. Looking at Africa and Latin America since 1979 makes me think that debt forgiveness is essential...

Brad DeLong



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