Monday, October 27, 2008

Economic Gangsters Uncovered!

Raymond Fisman and Edward Miguel, Economic Gangsters: Corruption, Violence and the Poverty of Nations . Princeton University Press, 2008.

This is a book that deserves a wide readership – I recommend it wholeheartedly.

Some readers will come for the clever title and the cover’s provocative silhouette of a machine-gun wielding gangster. More, I hope, will be drawn to the book by reviews like this one and the authors’ important message. Economic Gangsters is topical and lively, as its cover suggests, but it is also deadly serious and deeply engrossing.

Fisman (Columbia Business School) and Miguel (UC/Berkeley) study perhaps the most important question of our day – why some countries grow and prosper while others are trapped in a self-reinforcing cycles of violence, corruption and poverty. Economic incentives help create an these problems, the authors argue, and policies that alter economic incentives can help eliminate them.

The book features the sort of clear thinking, crisp economic analysis and creative empirical detective work that fans of Freakonomics will recognize and appreciate. Six major case studies and many smaller examples provide evidence to support the case. The authors conclude with a discussion of how cleverly designed program evaluation techniques can help uncover policies to escape the violence-corruption poverty trap.

I liked Freadonomics but I complained in my review that it didn't really have a point. Creative economic analysis is fun, but so what? What good is it? Economic Gangsters answers this critique. Economics is fun and useful. Dismal science? Hah!

One word review: Bravo!

1 comment:

Noemí said...

² The RCPS solution proposed by Fisman and Miguel Is excellent and success stories such as Botswana should serve as even more motivation for implementing such a program. It is especially helpful that the writers dispel the possibilities for corruption by pointing out that even the most corrupt leaders cannot withhold rainfall from the skies. It is a wonder that there isn't a RCPS program in almost every African country, considering Botswana began to implement theirs in the 1970s.