Big Push Approach & Sachs' Perspective

Addressing Impediments to Change

• The limitations of informational campaigns in changing behavior, especially when individuals lack information, bandwidth, and trust.
• Poverty creates a negative equilibrium, keeping people in poverty due to various mechanisms.

Big Push Approach

• Rationale: To break the cycle of poverty through significant investments.
• Sachs's Argument: Large-scale foreign aid can end poverty by addressing critical needs in health, infrastructure, and education.

Historical Context of Foreign Aid

• Twenty years ago, foreign aid from the global north to the global south was about 212,000,000,000. This figure aligns with Sachs's request when adjusted for inflation.
• Problem: Aid money is often misdirected or tied, hindering its effectiveness.
• Sachs's Solution: A dramatic change in how aid is spent, focusing on channeling funds to the right places.

Sachs's Core Argument

• Providing the poorest countries with financial resources for investments in health, infrastructure, and education can eradicate poverty.
• Preventable Child Deaths: Over two-thirds of child deaths annually are preventable.
• Saxe's motivation and call to action is rooted on addressing the deaths to children, he believes this is a catastrophe that happens every single day

Critiques of Aid and Growth

• Historical data suggests that increased aid has sometimes correlated with less growth.
• Angus Deaton's concept of the "aid illusion": The mistaken belief that poverty can be eliminated solely through financial assistance to poor countries.
• Foreign aid is complex; it can save lives but also create dependency and bolster dictatorships.

Easterly's Counterarguments

• Easterly argues that Sachs's portrayal of poverty contradicts economic and political science literature.
• Corruption and Aid: Sachs suggests channeling aid only to countries with reasonable governance to prevent corruption.
• Sachs's perspective: Corruption is avoidable with measures like computer systems, published accounts, job training, and higher pay for managers.

Aid Paradox

• Aid is most needed where it's least able to be absorbed effectively but can do the most good where it's least needed.

Millennium Villages Partnerships

• Sachs's initiative to test his ideas: Raised 120,000,000 to start the Millennium Villages Partnerships.
• Selection Criteria: Nine villages across Africa, each in a different macroecological setting and with a poverty rate of at least 20% among children under five.

Investments in Villages

• Health: Construction/rehabilitation of clinics, housing for staff, recruitment of additional staff, support for local referral hospitals, well-equipped laboratories, removal of user fees, ambulance services, and distribution of malaria bed nets.
• Education: Construction of schools and provision of living quarters for teachers.