A Checklist for Development Economics by Jeffrey D. Sachs

A global check-up.

Globalist Chart > Global Development A Checklist for Development Economics
By Jeffrey D. Sachs \| Wednesday, July 06, 2005

With many development projects seemingly faltering, Jeffrey Sachs argues that development economics needs to imitate modern medicine — making an individual diagnosis for every ailing country. In this Globalist Chart, we present his checklist for creating personalized remedies for the developing world’s economies in need.

Checklist for Making a Differential Diagnosis

I. Poverty Trap

Poverty mapping using household surveys and other data

Proportion of households lacking basic needs

Spatial distribution of household property

- Rural, urban

- Concentrated in a few regions vs. evenly spread

Spatial distribution of basic infrastructure

Ethnic, gender, generational distribution of poverty

Key risk factors

- Demographic trends, environmental trends, climate shocks, disease, commodity price fluctuations, others

II. Economic Policy Framework

Business environment

Trade policy

Investment policy

Infrastructure

Human capital

- Nutrition, public health, disease control, education, family planning

III. Fiscal Framework and Fiscal Trap

Public sector revenues and expenditures by category

- Absolute levels in comparison with international norms, percent of GNP
Tax administration and expenditure management

Public investment needs to meet poverty reduction targets

Macroeconomic instability

Overhang of public sector debt

Quasi-fiscal debt and hidden debt

- Central bank debt

Medium-term public sector expenditure framework

IV. Physical Geography

Transport conditions

- Proximity to ports, trade routes, navigable waterways, access to paved roads and motorized transport

Population density

- Costs of power connectivity, telecoms and roads, arable land per capita, environmental impacts of population-land ratios

Agronomic conditions

- Temperature, precipitation, solar insolation, length and reliability of growing season, soils, topography, suitability for irrigation, interannual climate variability, long-term trends in climate patterns
Disease ecology
- Human, plant and animal diseases

V. Governance Patterns and Failures

Civil and political rights

Public management systems

Decentralization and fiscal federalism

Corruption patterns and intensity

Political succession and longevity

Internal violence and security
Cross-border violence and security

Ethnic, religious,and other cultural divisions

VI. Cultural Barriers

Gender relations

- Discrimination against women and girls

Ethnic and religious divisions

Diaspora

- Role in investment, remittances, social networking

VII. Geopolitics

International security relations

Cross-border security threats

- War, terrorism, refugees

International sanctions

Trade barriers

- Developed-world tariffs and subsidies that impede development
Participation in regional and international groups

Taking the next step

The checklist is long. Answers to these questions cannot be ascertained in a 15-minute checkup at a clinic, nor, in practice, can they be addressed by a single international agency like the IMF.

The answers must be systematic, continually updated and put into a comparative framework for sound analysis. Many institutions — both within the low-income countries and internationally — should cooperation to address these diagnostic issues.

Not only the IMF and World Bank, but also the specialized United Nations, the Food and Agriculture Organization and many others should cooperat in the diagnostics.

A differential diagnosis is the beginning — not the end — of the process. The next steps, of course, are to design programs and institutions to address the critical barriers to poverty reduction that are identified through the differential diagnosis.

These strategies will be much more effective if the right questions are asked from the start.

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