The End of Poverty by Jeffry Sachs: A Critical Review and

Islamic Perspective
FOYASAL KHAN
PhD Student, Department of Economics,
International Islamic University Malaysia,
53100 Gombak, Kuala Lumpur
E-mail: foyasal.khan@gmail.com

The End of Poverty: Economic Possibilities for Our Time, a New York Times bestseller
book, is published in 2005 by American economist Jeffrey Sachs who is widely
considered to be the world's leading expert on sustainable development and the fight
against poverty. In the book, he coined the term clinical economics where he explains
countries like patients. As different patient needs different diagnosis and treatment, so in
order to address and remedy the specific economic stumbling blocks of various countries,
different countries require differential diagnosis, an understanding of context, monitoring
and evaluation, and professional standards of ethics. In turn, Sachs discusses and
provides potential remedies on many factors that can affect a country's ability to enter the
world market, including corruption; legal and social disparities; diseases; lack of
infrastructure; unstable political landscapes; protectionism; and geographic barriers.
Sachs states that in order to achieve the goal of eliminating global poverty, clinical
economics must be backed by greater funding where the developed world can play an
important role. In this paper, the idea of this intellectual giant will be critically reviewed
and evaluated from an Islamic perspective.
Key words: Poverty; clinical economics; Islamic perspective

In some ways, todays development economics is like eighteenth

century medicine, when doctors used leeches to draw blood from
their patients, often killing them in the process.
Jeffrey D. Sachs, 2005: p.74

The Concept of Economic Ladder

The Concept of Clinical Economics

https://realsociology.edublogs.org/2012/01/22/3000-word-oops-summary-of-chapters-14-of-sachs-the-end-of-poverty/

A Brief Summary of Jeffrey Sachs End of Poverty Chapters 1-4

It would be useful for students of Global Development to

develop a critical understanding of this book because Sachs has been one the most
influential economic advisors to both Nation States and global financial institutions such
as the IMF over the last three decades. Jeffrey Sachs is well known popularly because of
his links with Bono and his championing of the role of Western Aid and Philanthropy in
helping to solve development problems.
Sachs is critical of grand theories of development- such as 70s Dependency Theory
and the Neo-Liberal approach of the World Bank/ IMF in the 80s and 90s but he is still
optimistic that if we can engage in what he calls clinical economics and uncover the

country specific barriers there are to development in individual countries, we can

develop effective strategies to end poverty- both the extreme poverty faced by the worlds
billion poorest, and also the moderate poverty faced by another 1.6 billion.
While development strategies need to be specific to each country, Sachs sees
international co-operation crucial to ending extreme poverty and so Western Official
Development Aid, good governance on the part of developing nation states,
Transnational Corporations, and The United Nations all have a crucial role to play in
bringing about development. Technological innovation, and Trade (including changing
the rules of trade so they dont unfairly benefit developed nations) are seen as key
universal strategies to be adopted to bring about development.
Sachs is also a champion of the United Nations 8 Millennium Development Goals not
as ends in themselves but because lack of development in each of the 8 areas other than
economic well being can be a barrier to economic development, which in Sachs mind is
correlated with all other development goals, and economic growth, measured by rising
GDP per capita, to be achieved through the integration of countries into the global
economy through trade remains the ultimate goal of development according to Sachs.
Students can use Sachs to all the popular theories of development from the preceding six
decades Modernisation Theory, Dependency Theory and Neo-liberalism. Below is a
summary of selected chapters of Sachs The End of Poverty, with some criticisms.

Chapter 1: A Global Family Portrait

Sachs outlines elements of life in four countries Malawi, Bangladesh, India and
China which broadly correspond to four stages of development

Malawi caught in the perfect storm is portrayed as a Malaria and AIDS

infested rural backwater, largely cut off from international trade represents the
four billion people trapped in extreme poverty living on less than $1 a day
Bangladesh on the ladder of development is integrated into the
international economy but at the bottom end of it, and characterized by
sweatshop labour but also increasing amounts of micro-financed businesses
which offer hope for more independent economic development represents the
poor or the 1.5 billion people living on between $1-$2/ day
India at the centre of an export services revolution is provided as an
example of a country that is increasingly populated with people on middle
incomes with increasing numbers of city dwellers working for Transnational
Companies and related home-grown business earning $250 -$400 a month
although India is a country of extremes with many in rural areas living on $1-2 a
day

China is characterized by rising affluence again like India there are millions
who live in poverty, but parts of China are increasingly coming to resemble the
West. Sachs in fact tells of how he first saw cell phones with cameras in Beijing,
not America.

Who are the poor?

Poverty is not uniformly distributed across the globe i.e. there are rich and poor people
in every country, although most of the poor live in three regions South and East Asia
and Sub Saharan Africa. Where extreme poverty was concerned Sachs notes that the
figures were as follows (NB these are 2001 figures!) (Updates to follow)

South Asia 400 million (30% of the population)

East Asia 250 million (15% of the population)

Sub Sharan Africa 300 million (40% of the population )

Sachs also notes that there is hope because the numbers of those in extreme poverty in
East and South Asia have fallen by 2/5ths and 1/3rd respectively since 1981, although
numbers grew slightly in Africa.He then goes on to state what should be the four
development goals of our age

To meet the MDGs by 2015

To end extreme poverty by 2025

To ensure that by 2025 all the worlds poor have an opportunity to climb the ladder
of economic development

To accomplish this with modest financial help from the rich countries.

Chapter 2 The Spread of Economic Prosperity

According to the economic historian Angus Maddison, 1820 was the year when The
Great Transformation began. 1820 was the year when the Modern World Economy took
off. The previous 800 years had seen no significant increase in world population growth
or income, but from 1820, population and economic growth began to grow rapidly.
Referring to this rapid period of post 1820s growth, Sachs notes that

All regions on earth experience economic growth

Some regions grew much more rapidly than others.

To illustrate this, in 1820, the income of the average European was only 90% that of the
average African and the average life expectancy was very similar, around 40 years of age.
Focusing on GDP/capita, the UK was only four times richer than Africa, by 1998 this had

rise to 20 times greater (factoring in PPP). We can roughly break down this inequality as
follows

1/6th of the worlds population lives in extreme poverty

2/3rds experience middle income lifestyles

1/6th experience high income

Why did some countries grow so rapidly from the 1820s?

Sachs now looks at the United Kingdom as the country that, from 1820, developed more
rapidly than any other and asks why? He points to the following features 1. British Society was relatively open- there was scope for social mobility and
hierarchies were less rigid than in most of the rest of Europe
2. Britain guaranteed certain individual freedoms (individualism) it had a tradition
of free speech and protection of private property
3. 3. (and critically) It was one of the leading centres of scientific revolution. In
particular, Newton laid the groundings for the industrial revolution. NB Sachs
argues that technological innovation is the critical element in bringing about
development
4. Geographical advantages It was an Island close to Europe with inland navigable
waterways
5. Britain faced less risk of invasion compared with its neighbours in Europe
6. Britain had coal the energy source that fuelled the great industrial revolution.
The Combination of new industrial technologies, coal power and market forces created
the industrial revolution and this meant that economies could grow beyond longaccustomed bounds without hitting the biological constraints of food and timber
production. The industrial revolution in turn lead to economic growth and these two
things changed the way people lived in Britain in every fundamental sense. They lead to
what Sachs calls the Great Transformation in which British society and culture were
transformed, laying the foundations for yet more growth and prosperity[1]
Sachs also mentions that Colonialism was key to Britain, and Europes development
which involved the use of military force to press-gang Asia and Africa to the service of
Western Development Although Sachs argues that its not as simple as the Wests
development coming at the expense of India and Africa, in the long run, the Wests
expansion into these regions helped bring about some, albeit extremely limited, economic
growth. Colonialism and exploitation of the developing world did occur, but these are not
sufficient reasons to explain why certain countries, and indeed most of Sub Saharan
Africa failed to develop which is the topic Sachs turns to in chapter 3.
Chapter 3 Why some countries fail to achieve economic growth

In this chapter Sachs suggests eight things that can prevent a country developing
1. The Poverty Trap Poverty itself as a cause of economic stagnation The key

problem for the poorest countries is that poverty itself can be a trap. When
poverty is very extreme, the poor do not have the ability by themselves to get
out of the mess. This is because, when people are utterly destitute, all energy goes
into survival and there is no capacity to save anything for the future.
2. Physical geography Being landlocked or hemmed in by mountainous terrain
can prevent access to trade networks that bring about development this is the
case with Bolivia (mountains) and Ethiopia (landlocked and poor transport
networks). Also Sub-Saharan Africa has an ideal climate that allows malarial
mosquitoes to breed, which has decimated much of the population in recent
decades.
3. Fiscal trap the government may lack the resources to pay for the infrastructure,

on which economic growth depends such as health care, roads, ports, education.
There are three reasons for this firstly, the population may be too poor to tax,
secondly it may be inept or corrupt and finally it may be debt burdened.
4. Governance failures governments have a crucial role to play in development

not only through developing infrastructure but also through resolving conflicts
and ensuring peace and stability. At the extremes, poor governance can result in
failed states which can often lead to economic deterioration.
5. Cultural Barriers The two main ones are patriarchal countries which deny

women equal rights with men not only does this bar half the population from the
opportunity of being economically active, keeping women in a child-rearing role
is linked to higher fertility rates, and greater poverty, and also religious and ethnic
differences can lead to tensions and even genocide.
6. Trade Barriers Some countries economies are crippled by unfair trade rules,

for example The Four West African countries whose primary export is cotton are
held back economically because of the USAs subsidies to its own domestic cotton
farmers.
7. Lack of Innovation The innovation cycle (aka endogenous growth) is one of

the main factors responsible for the Wests and now Asias rapid economic growth
New products being produced and consumed lead to more innovations as people
develop more products related to them (E.G. Now we have Smart Phones
people innovate and develop new applications) Where people are so poor they
have nothing, there is no scope for innovation!
8. The demographic trap Poverty leads to higher fertility rates (families

choosing to have more children) Economic growth leads to fewer children.

Women in the poorest countries have on average 4-6 children simply put it is
harder to feed so many children, and impossible to send all of them to school
resulting in a cycle of poor health, low education and yet more poverty.

Why some poor countries grew and others declined

To cut a medium length section short the most important factor Sachs points to not
covered above is food productivity quite simply, the reason why Asia has grown more
rapidly than Sub Saharan Africa in the last 30 years is that they have experience a green
revolution they are capable of producing twice as much food per hectare because of
better irrigation and selection of more modern species of crop. He also mentions the fact
that natural shocks have prevented some countries from developing. He then gives a
few examples of different countries that have experienced a selection of the problems
above in the years since WW2.

The greatest challenge: overcoming the poverty trap

The end of chapter 3 (P73) is where Sachs outlines his classic statement of development
to quote
The main object of economic development is for the poorest countries is to help these
countries gain a foothold on the ladder: The rich countries do not have to invest enough
in the poorest countries to make them rich: they need to invest enough so that these
countries can get their foot on the ladder. After that, the tremendous dynamism of selfsustaining economic growth can take hold.

Chapter 4 Clinical Economics

Sachs has developed a new sub-discipline called clinical economics. Each failed conomy
is unique and its ailments must be carefully diagnosed before a prescription suited to the
condition can be written. Sachs includes helpful checklists to diagnose the causes of
economic decline and formulate a cure for the malady. We need to look at the following
aspects of a country, and its relationship to the wider world in order to assess what
assistance is needed to enable it to progress further up the ladder of development:
1. The Nature and distribution of poverty and its ultimate causes/ potential risk
factors including commodity price fluctuations and climate shocks
2. Government policies and capacity to invest in infrastructure
3. Physical Geography including transport conditions, agronomy, population
density and the disease landscape
4. Governance Patterns and failures civil rights, corruption
5. Cultural Barriers Gender and ethnic divisions
6. Geopolitics Cross boarder threats (wars/ refugees) and also trade relations.

So, at the end of the day, by 2005, this was the bottom line of development theory it
maybe flippant to say this about one mans life work but it dont sound like rocket
science to me! Of course I am aware of the fact that doing the analysis and implantation
is an extremely time consuming task.
If I get time I may post the rest of the summary laters! (No promises)

Criticisms of the End of Poverty

Firstly a few of my own
1. He puts too much emphasis on economic growth as a goal in itself It is quite
clear that economic growth does not yield uniform increases in quality of life
across all countries take Saudia Arabia, and possibly Nigeria as examples of
countries you probably dont want to live but they have either a high GDP or a
rapidly growing economy.
2. I have a problem with idea of economic growth being self sustaining although
you might say Im saying this with the hindsight of the 2008 financial crash, this
is actually coming from basic Marxist economics a system cannot keep on
growing at the rate of 2-3%, let alone at 7-8% for ever because the bigger you
get, the harder the harder it is to maintain economic growth rates. (8% of $500
billion output is much more than 8% of $50 billion!)
3. He hardly mentions sustainable development, or the idea of limits to growth
4. Clinical Economics maybe just sounds like an excuse to employ thousands of
more development experts to diagnose developing countries specific problems.
And criticisms from others
This is a brilliantly scathing critique! among the criticisms

He is not critical enough of Corporations and their role in pulling the strings of
Western Governments who create trade policies that benefit Western
Corporations rather than developing countries
Even though he is critical of the IMF and neoliberalisation he still argues that
Trade is ultimately the solution to developing world problems

Related to the above point this is still a Eurocentric theory it is up to us to help

them

Sachs also fails to acknowledge the work of developing world economists who
came up with many of the ideas he seems to present as his own in The End of
Poverty.

This post by John Vidal is also pretty scathing - among his point he argues that Sachs
seems to be suffering a dose of advanced consultivitis symptoms include a swollen ego
and a fervent belief that you can change the world. In a work littered with tales of
meetings with presidents and global dignitaries, he plays the moral economist who goes
from country to country handing out pills and mopping the fevered brows of
administrations in economic crisis.
This blog offers up some nice criticisms of Sachs work - among them

He puts too much faith in the power of economic growth to solve all social
problems citing the example Saudi Arabia as a country that has a high GDP per
capita but still a massive birth rate (and thus an eventual tendency to
overpopulation
Another problem of econmic growth is that labour is mobile so if you invest in
education as part of a growth strategy, once people are educated they tend to
leave for more developed countries where they are better paid (known as the
brain drain)
Even though he suggests (eventually) that aid can be an effective means of lifting
a country out of poverty he fails to give any examples of where aid has actually
been effective at helping a poor country take off successfully.

[1] The list of changes that Industrialisation and economic growth lead to is eerily
evocative of Modernisation Theory from the 1940s Sachs notes 5 aspects of the Great
Transformation
1. First and foremost Urbanisation
2. A revolution in social mobility
3. Changing gender roles
4. New family structures (lower birth rates)
5. An increasingly complex Division of labour with people getting more skilled

This entry was posted on January 22, 2012 at 07:23 and is filed under Global
Development, Globalisation. Tagged: Development, End of Poverty, Sachs, Summary.
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http://www.visionofearth.org/news/what-is-the-ladder-of-economic-development/
http://www.jstor.org/discover/10.2307/40204067?
uid=18431528&uid=3738672&uid=2129&uid=2&uid=70&uid=3&uid=67&uid=167390
16&uid=62&sid=21104250021751
http://s3.amazonaws.com/zanran_storage/www.sais-jhu.edu/ContentPages/19157432.pdf
http://www.leftbusinessobserver.com/Sachs.html