Wednesday, April 8, 2009 - Aid Keeps Latin America Poor

Latin America remains poor and backward not despite multilateral "assistance" but, in a large part, because of it.

Bauer spent a lifetime studying development. In 1972 he published "Dissent on Development" sharply criticizing aid for its focus on "symptoms and effects" of poverty while "divert[ing] attention from the determinants of development." For Bauer, foreign aid was not just a waste of money; it worked against getting things right in those areas that really matter to progress. Those "determinants" are now widely acknowledged, even by researchers at the World Bank. They produce an annual "Doing Business" survey that looks at the regulatory burden in 181 countries and points out the critical link between economically free people and prosperity.

It is obvious that economic liberty and property rights are the key drivers of development, and that there is no correlation between the volume of foreign aid a country receives and its respect for these values.

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