The potential of Western development aid and assistance, aimed at lifting the world’s poorest out of poverty, is often ‘wasted’ in countries lacking functioning, accountable institutions and where the rule of law is not fully established, according to a new report by the University of Warwick’s Centre for Competitive Advantage in the Global Economy (CAGE), published by think tank the Social Market Foundation (SMF).
The report Unlocking Development, authored by academics from CAGE and drawing on new case studies from developing countries, argues that despite increased aid and assistance the world’s poorest nations are ‘trapped’ in poverty and short-term growth by a variety of factors including:
- the absence of an enforced, accountable framework of laws which are applicable to all;
- a lack of business expansion and productivity due to poor contract enforcement and difficulty accessing Western markets; and,
- restrictions on the roles that women can play in society.
The report considers these problems on three levels, the national economy, the private sector, and citizenship. Unlocking Development does not advocate detailed reforms to which every country must conform; instead it sheds light on what measures have been shown to work in particular contexts and periods. CAGE calls on Western policymakers to focus on proven ways of ‘unlocking’ economic development within these countries including:
- fostering a robust civil society and private sector;
- assisting with the development and enforcement of legal frameworks;
- strengthening capacity of national governments to tax and spend on basic public goods;
- supporting buyer-seller networks and boards for industries seeking to access Western markets; and,
- applying pressure on national governments to address gender crime and promote active participation of women in political and public life.
Report editor and CAGE Associate Director, Professor Mark Harrison, said:
“Developing countries can achieve short term growth and modest prosperity despite injustice and corruption, but many traps and pitfalls await them on the path to long term social and economic development. Obstacles include inter-communal and inter-personal violence, fragile private enterprise, and subjugation of women’s role in society. This report uses history, statistics, and detailed studies of success stories from Europe, Africa, and Asia to show policymakers how these obstacles can be overcome so that sustainable growth takes their place.”
Commenting on the findings SMF Director Emran Mian said:
“This report debunks the idea of economic development as merely a mechanical process of increasing output. Instead the reason why we value economic development is that it expands the control ordinary people can exercise over their own lives. This is how markets contribute to social justice; and the new research by CAGE published in this report shows the importance of good governance, a robust civil society, stable networks and the transparent enforcement of contracts in making it possible.”
Notes to Editors:
- Unlocking Development is project developed in partnership between the University of Warwick’s Centre for Competitive Advantage in the Global Economy (CAGE), the Economic and Social Research Council (ESRC), and the Social Market Foundation.
- CAGE is a research centre in the Department of Economics at the University of Warwick, established in January 2010. Funded by the ESRC, CAGE is carrying out a 10 year programme of innovative research examining how and why different countries achieve economic success. www.warwick.ac.uk/cage
- The SMF is a leading independent UK think tank established in 1989 with the aim of marrying market economies with social justice. We develop innovative ideas across a broad range of economic and social policy, taking a pro-market rather than free-market approach. smf.jynk.net