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Beyond Aid and Trade

August 15, 2005

The international community must ask itself what really matters for development, so that good intentions can be translated into real benefits for the poorest countries, according to the authors of this provocative Foreign Affairs article, Nancy Birdsall, Dani Rodrik, and Arvind Subramanian.

To a large extent, sustainable progress is in the hands of the poor countries themselves, they say. That said, they go on to argue, the developed countries should not abandon the poor to their plight.

But if rich countries truly aim to help developing countries achieve lasting growth, they must think creatively about the development agenda. If aid is increased and delivered more effeciently and if trade inequities are addressed, then the two traditional pillars of development will yield rewards. But these rewards should not be overestimated.

Indeed, other courses of action—such as giving poor nations more control overeconomic policy, financing new development-friendly technologies, and opening up labor markets—could have more significant benefits. It is time to direct the attention of the world’s wealthiest countries to other ways of helping the poorest—ways that have been for too long neglected.

PDF available courtesy of Foreign Affairs, July/August 2005

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Photo of Nancy Birdsall
Senior Fellow, President Emeritus