poverty

The Economics of International Development

There are many who believe that the record of foreign aid is at best patchy and that it may do a great deal of harm. Aid is certainly neither a necessary or sufficient condition for development. Many countries have developed with very little or no foreign aid (especially in Asia). Other countries, such as Zambia, have received huge amounts of foreign aid and yet have stagnated. Other large aid recipients have become poorer.

There are downsides to foreign aid. Aid might actually encourage the kind of poor governance that can lead to disastrous economic, social and political outcomes. Aid can also undermine the relationship between a government and its peoples because the government does not need to turn to an electorate to raise taxes to fund spending.

This is the root of the problem. Foreign aid involves planners trying to find technical solutions to a country’s underdevelopment. The same plans that have been wheeled out time and time again for decades have demonstrably failed. What is needed instead is the promotion of human rights to allow people to be responsible for their own development, and the promotion of human rights to allow people to be responsible for their own development.

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