Why was "as fast as possible" important for Russia etc. but not for the "third world" ?
Charles Brown
>>> Brad De Long <delong at econ.Berkeley.EDU> 09/15 12:51 PM >>>
>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