Search

The authors offer opinions on international economic assistance to poor people in developing countries. It is argued that existing programs offering poor people goods and services designed to increase development such as payment for agricultural supplies, business training and livestock are an overly expensive and inefficient means of mitigating poverty. Research on economic assistance conducted by nonprofit organizations and by the World Bank is cited in support of the contention that direct cash payments to poor people is the most effective means of mitigating poverty and increasing economic development.

Liberalism has brought sharp reductions in both poverty and international inequality. The past half-century can be seen as a long exploration of the power of liberal trade to raise living standards, not only in the rich world but among the poor too. The story begins with the growth that took place in western Europe, North America, Australasia and Japan once the two great scourges of economic activity--war and trade restrictions--were removed after 1945. The rest of the world--communist, socialist, or just plain poor--also grew, but more slowly: at 2.2% a year on average, or a threefold rise in income per head. Thus the gap between "the West and the rest", as Angus Maddison, an economic historian, described it in an OECD report in 2002 from which these figures are taken, has been widening. Though it does little to promote democracy, China is proving a spur to economic liberalization in other developing countries: fear that its growth will steal their markets or investment is prompting others to copy its reforms and to adopt international trade rules by joining the World Trade Organization.

Comments on United States contributions to global economic development. Impact on the U.S. of an impoverished country collapsing; View that the U.S. should pledge assistance of at least 0.3 percent of its gross domestic product (GDP); How the U.S. compares to other countries in providing aid to poor countries; Guidelines suggested for U.S. investment in foreign policy.