Task: Critically Review the text “Was Development Assistance a Mistake|
A Critical Review of Easterly, W 2007, Was Development Assistance a Mistake?, American Economics Review, 97(2), pp 328-332.
Foreign aid focuses on promoting economic and human development ( Williamson, R 2009).Many experts attempt to possess the knowledge and skill to help poor nations. The key theme of “Was Development Assistance a mistake?” is Easterly’s argument, how development assistance fails to achieve economic development in poor nations. In this context, Easterly discusses the efforts of development experts that try to boost economic growth in various poor countries. He criticizes the development experts and development aid by building the article based on three assumptions: We Know What Actions Achieve Economic Development, Our Advice and Money Will Make Those Correct Actions Happen and We Know Who “We” Are. He argues that those assumptions finally brought development assistance into a mistake. William Easterly, a former World Bank Economist and development expert, argues that development assistance has largely been misapplied because it was given based on three assumptions that were actually not true. The first assumption that Easterly scrutinizes is the belief that development experts know what actions are needed to achieve economic development. He explores this by looking at previous policy which emphasized on raising the rate of investment to increase Gross Domestic Product (GDP). Development experts previously believed that it could stimulate economic development in poor countries. However, the expectations of the investment were not met. As a result, it led to two debt crises during the 1980s, especially in Latin America and Africa. Those poor countries could not repay debts even they followed new development policies which were adopted from successful countries by experts who assumed that they know what works. Those...