Off the shelf: Economic history and development

book reviews ▪ economics ▪ Off the shelf

Yes, I know. I promised the second part of this post this week, but I haven't gotten around to finishing it. Meanwhile, nothing of interest on the policy front (oh, except this neverending debate on rice import policy. But I've brushed on it here, and if that's still not enough, there are more here and here, both in Indonesian).

So instead, let me share with you some books on economic history and development from my bookshelf. Links to Amazon are provided.

Let's begin with economic history. I haven't read a whole lot on economic history, but I like David Landes's The Wealth and Poverty of Nations a lot. Landes's book tried to answer a question similar to that of Jared Diamond's international bestseller, Guns, Germs, and Steel of why some countries are poor, and other rich.

However, Landes took an a slightly different route. Instead of focusing on several dominant factors, he went wide and deep, both in terms of hypotheses and geographical coverage. I find it an engrossing reading. Its depth and breadth is exceptional, though I find Landes is a little light on the East Asian story outside that of Japan and China.

Still on economic history, Benjamin Friedman's recent book, The Moral Consequences of Economic Growth, is an interesting read. He argued that Weberian link between ethics and capitalism was actually a two-way street: Not only ethics caused growth, but vice versa was also true. Taking evidence from history, Friedman isn't always convincing, but the argument is clearly worth making. And the book worth reading.

As an economist, Friedman's argument tempts me. But even if Friedman is wrong, the case of economic growth is not lost. William Easterly's excellent, excellent first book The Elusive Quest for Growth made a forceful argument – backed by theory, empirical evidence, and an emphatic eye for poor countries' plight – for growth. Alas, he suggests that growth is elusive. There is no silver bullet to kill the beast that dragged African countries' growth down.

This conviction was one reason why he was so angry with what he found to be naivete in Jeffrey Sachs's The End of Poverty. That anger is reflected in his second book, The White Man's Burden, where he argued that Western aid would amount to nothing unless they were channelled in the manner that took accountability and local conditions seriously. His arguments are convincing, but I miss the cool, emphatic tone of The Elusive Quest.

In the development circle, the Sachs vs. Easterly argument, in particular with regards to the value of increased aid, was quite intense. The focus is, as always, on Africa. Sachs argued that Africa wasn't mainly poor because of corruption and bad governance, but because of "poverty traps" due to bad geography and climate. Easterly, in academic papers and his second book, refuted that argument.

I found the support for Easterly's argument not in a book on economic theory, but in Martin Meredith's The Fate of Africa, a tome on 50 years of African independence. Reading it, it's hard to not see (elite?) corruption and bad governance (with their effects on violent conflicts) as the bane for poor Africans.

Abstracting slightly, there is Amartya Sen's guide to the philosophical and economic foundations of welfare economics, Development as Freedom. I used to take this book for granted, but I feel I need to reassess it after reading pragmatist Hilary Putnam's The Collapse of the Fact/Value Dichotomy and Other Essays. But first, I need to find it from my mess of a "bookshelf".

On Indonesia, two books stand alone in its deep coverage of Indonesian economic policy history. Hal Hill's The Indonesian Economy provided good reference on Indonesian economic history covering the period of 1966 to 2000 (from the beginning of the New Order to the early part of the crisis period).

Meanwhile, for labour specialists, Chris Manning's Indonesian Labour in Transition gives an excellent overview of the Indonesian labour market. But damn, look at that price!