Book Review of The Elusive Quest for Growth by William Easterly Essay (Essay Sample)

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Summary of the main arguments
According to Easterly, initiatives by Western nations to deal with poverty in developing countries have not been successful. Some of the initiatives adopted include offering foreign aid, controlling population growth, investing in machines, offering debt relief, and giving conditional loans to poor countries. However, in all these cases, these initiatives have not been successful, and the affected countries have continued to be poor. Examples of regions where this has happened include South Asia, Middle East, Latin America, and sub-Saharan Africa. Based on these effects, Easterly claims that these failures do not highlight the failure of economics, but showcase the lack of adoption of economic principles in policies targeting poor countries. There are various investment models that have been discussed by Easterly, which indicate the impact that increased investment would have on the GDP, some of these models include the Rostow growth stages, Lewis Model and Harrod-Domar Model.
According to the Harrod-Domar model, increased investment in infrastructure positively contributes to growth (Easterly 27). Although he later stated that this model was not practical in the long-run, it has continued to be applied in poor countries around the world. The Rostow growth stages highlighted the need for rich countries to fill the financing gap that exists between the required investments and domestic savings. In this case, it was assumed that economic growth arises from an investment-led takeoff. However, after an analysis of the various countries whereby this approach was used, it was evident that it was ineffective in achieving the required benefits.