Measuring development

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That is the title of today’s lead editorial in the Washington Post, in advance of this weeks annual World Bank and IMF meetings. They argue that the new rockstar enthusiasm for helping poor countries is often misplaced.

…debt relief will save poor countries a tiny amount relative to what they can expect by way of aid. Equally, aid gets more attention than other policies that may matter more. Immigration policy is one example: The money sent home by workers from poor countries who hold jobs in the rich world comes to more than all official aid budgets combined, and the correlation between remittances and poverty reduction appears to be stronger than the correlation between aid and poverty reduction. Likewise, aid probably matters less than trade policy, too.

Their suggestion:

…the rich world needs to take a broad view of its interactions with poor countries, factoring in not only aid, trade and migration but also contributions to the poor world's military security, environmental prospects and access to investment capital and useful technology.

They also discuss the pros and cons of the Commitment to Development Index.

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