This volume consists of two comments on Sachs' paper, "Russia's Struggle with Stabilization: Conceptual Issues and Evidence," followed by a summary of the floor discussion on the paper. Both comments analyze the Sachs model and its policy implications, including implications for foreign aid. The first comment discusses two key questions in deciding whether Russia had or has a chance to stabilize. The first question concerns the choice of a transparent and easily monitored commitment that will shock the economy back from the bad equilibrium to the good equilibrium. To fulfill this role, the author recommends a general price liberalization complemented by monetary reform. The second is how close Russia was and is to fixing the fundamentals. In the Russian context, it means limiting monetary expansion. The second comment disagrees with Sachs' view that to stabilize Russia's economy, it simply needs to move back into a good equilibrium. Some of the structural characteristics of the Russian economy and the political system make it particularly difficult for the government to cut public spending. Firstly, the structure of the governments is extremely susceptible to lobbyists' pressure. Secondly, the social safety net is underdeveloped and would be unable to cope with the high unemployment that is likely to result from the stabilization.
Jeffrey David Sachs is the Director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. He is also Special Advisor to United Nations Secretary-General Ban Ki-moon. From 2002 to 2006, he was Director of the UN Millennium Project and Special Advisor to United Nations Secretary-General Kofi Annan on the Millennium Development Goals, the internationally agreed goals to reduce extreme poverty, disease, and hunger by the year 2015. Sachs is also President and Co-Founder of Millennium Promise Alliance, a nonprofit organization aimed at ending extreme global poverty.
He is widely considered to be the leading international economic advisor of his generation. For more than 20 years Professor Sachs has been in the forefront of the challenges of economic development, poverty alleviation, and enlightened globalization, promoting policies to help all parts of the world to benefit from expanding economic opportunities and wellbeing. He is also one of the leading voices for combining economic development with environmental sustainability, and as Director of the Earth Institute leads large-scale efforts to promote the mitigation of human-induced climate change.
In 2004 and 2005 he was named among the 100 most influential leaders in the world by Time Magazine. He was awarded the Padma Bhushan, a high civilian honor bestowed by the Indian Government, in 2007. Sachs lectures constantly around the world and was the 2007 BBC Reith Lecturer. He is author of hundreds of scholarly articles and many books, including the New York Times bestsellers Common Wealth (Penguin, 2008) and The End of Poverty (Penguin, 2005). Sachs is a member of the Institute of Medicine and is a Research Associate of the National Bureau of Economic Research. Prior to joining Columbia, he spent over twenty years at Harvard University, most recently as Director of the Center for International Development. A native of Detroit, Michigan, Sachs received his B.A., M.A., and Ph.D. degrees at Harvard University.