Project Syndicate - Print Commentary

Political economist from Harvard argues that trade and aid don't work...

Project Syndicate - Print Commentary: "Trade and aid have become international buzzwords. More aid (including debt relief) and greater access to rich countries’ markets for poor countries’ products now appears to be at the top of the global agenda. Indeed, the debate nowadays is not about what to do, but how much to do, and how fast.

Lost in all this are the clear lessons of the last five decades of economic development. Foremost among these is that economic development is largely in the hands of poor nations themselves. Countries that have done well in the recent past have done so through their own efforts. Aid and market access have rarely played a critical role."...

None of this absolves rich countries of their responsibility to help. They can make the world less hospitable for corrupt dictators – for example, by greater sharing of financial information and by not recognizing the international contracts that they sign. Similarly, increasing the number of poor-country workers allowed to work in rich countries, and providing greater scope for growth-oriented policies by relaxing WTO rules and conditionality from the US, would produce greater long-term development impact.

It is far from clear that expanding market access and boosting aid are the most productive use of valuable political capital in the North. Development should focus not on trade and aid, but on improving the policy environment in poor countries.