This article, published in the issue of "Foreign Affairs" dated July/August 2005, questions a lot of ready-made ideas about foreign aid and about the ways to "help poor countries". The main interest of this article is that it questions the foreign aid as the provision of resources from a country to another and trading opportunities, which are usually considered as the most efficient tools to promote development of poor countries. Such an aid has only limited effect on the long-term development of these countries. The authors argue that the successes of poor countries remain mostly on internal factors, such as the development of their economical, political and social institutions, which enable them to make an effective use of the opportunities they face. They feel that "development is something largely determine by poor countries themselves".
[...] Related to this point, there is another important and original feature of this paper: it is aware that one single theory, a unique model can not explain the success or the failure of the specific development of a country. Indeed, each country has its own economical, historical and institutional background which may define what kind of policies may work the best for it. Therefore, the authors are right to insist on the fact that there is not a miracle recipe to bring these countries out of poverty but that it depends on each situation. [...]
[...] Furthermore, although according to their strong economic demonstration, there is no doubt that “small relaxations of work visa restrictions generate large income gain for workers from poor countries” (it has been proved many times that this can even be beneficial to the economy of rich countries), it is more doubtful that this kind of arrangement can be implemented. In fact, according to which criteria shall a country grant a work visa to a foreign worker and refuse it to another? It seems pretty hard to develop such a policy and at the same time to keep control upon the number of migrant workers you authorize and to try to make this policy fair. [...]
[...] The development of Asian countries can be a case in point. A study for the African Development Bank and conducted by Simon Appleton and Francis Teal has found a strong correlation between the level of Human capital (education, health ) and the economic development of Asian and African country, provided the physics capital(infrastructures, firms, technology) is developed in parallel.[5] The authors should maybe not forget that strong political institutions without basic human capital are quite useless or at least will have to face a huge challenge. [...]
[...] This is, I think one of the major strengths of this article. On the other side, there are major points in this article that can be challenged. For instance, although I totally agree that donor countries should take into consideration the institutional development of the countries they want to help before providing them with aid, it leads the authors to a questionable idea. In fact they seem to consider that aid should not be sent to corrupted or dictatorial government. [...]
[...] Moreover, it is worth noticing that although it seems obvious that corrupted government would not be able to manage foreign aid successfully, the case of China contradicts that: its level of corruption though being one of the highest in the world, has never prevented its industrialisation and its economic success, making notably a very effective use of foreign aid and foreign direct investment[4]. Indeed, some of the countries which are coping the most with corruption (Vietnam, Russia . ) are facing rather high economic growth and do best than some democracies. What seems to be at least as important as governance or democratic development of a country is their social and human capital, which is not mentioned in the paper. [...]
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