actually most economists are quite aware of the existence of political restraints, even if they limit the power of their analysis (in some cases) by making those limits entirely exogenous. Theres even a concept called "the theory of the second best" which assumes in given situations that the optimal policy is not feasible, and then will propose what may otherwise be a non-optimal policy.

I'm not aware of any economic theory that posits the existence of an optimal solution to these kinds of problems, because they always end up trading off one person's utility function vs another's. If we are lucky, there exists one or more policies that are better by some measure for enough people that a policy consensus is possible.

I've been skeptical about economists ever since I saw Sachs debate historian Steve Cohen over Russian privatization (I was an undergrad at the time) in 1992. Anyone who understood anything about Russia knew Sachs was wrong, terribly wrong about shock therapy and how it would play out in Russia. Sachs (along with Larry Summers and a host of economists at treasury and WB/IMF) won the day and the result was an unmitigated disaster. We gave legal cover to the largest theft in human history and put it under the guise of 'democratization and market reform.' And people are surprised Russians love Putin?

I am glad to see Sachs is now working at the village level. While I am sure he will continue to make a mess of things at least the damage will be contained.

I think it depends on what school you go to as to whether or not politics is important.

Concerning Sachs, he came by I think about a year ago trying to sell his ideas. I didn't go as I think I was enjoying some beer that afternoon, but some did and reported back. One of the problems with his idea is that even if gains are produced the rents will extracted by the powers that be. You need institutional change that allows benefits to accrue to those learning new agricultural techniques and so forth to alleviate their poverty. Otherwise, the city elites will just take what they please.

As far as Sachs as economist, I'm not overly impressed. The few things I've read by him were flawed.

Purely theory-based, pie in the sky thinking is absolutely critical. The payoff however, may not be visible for decades.

Virtually all modern democrats are happy to describe themselves as Keynesian, but they may or may not have any idea exactly what that means outside of opposition to Republicans and their so-called "supply-side economics".

Once a generation a political thinker will emerge to change the course of history, and they will use some dead economist's ideas. We need to pay more attention to guys like Newt Gingrich who fancy themselves idea men and have the ear of many prominent politicians.

Speaking of those prestigious Reith lectures, I saw the one at Columbia, and boy was Sachs underwhelming. Makes me agree with you, Dan: a bright economist can be reeealy unimpressive on politics. Maybe it was the worldwide broadcast format, but Sachs didn't say anything -- literally -- that I wouldn't expect from a decently bright undergraduate in a senior seminar on foreign policy. I felt annoyed at having travelled the 60 blocks uptown to see it.