How to Help Poor Countries

THE YEAR 2005 has become the year of development. In September, at the UN Millennium Summit meeting of heads of state, in NewYork, leaders of wealthy nations will emphasize their commitment to deeper debt relief and increased aid programs for developing countries. The Millennium Development Goals, the centerpiece of the conference's program, call for halving the levels of world poverty and hunger by 2015. The summit will focus on increasing international aid to 0.7 percent of donors' gross national product to finance a doubling of aid transfers to especially needy areas, particularly in Africa. With respect to global trade, efforts will center on the Doha Round of multilateral trade negotiations and opening markets to important exports (such as cotton) from developing countries. The discussions will thus proceed based on two implicit but critical underlying assumptions: that wealthy nations can materially shape development in the poor world and that their efforts to do so should consist largely of providing resources to and trading opportunities for poor countries. These assumptions ignore key lessons of the last four decades and of economic history more generally. Development is something