STRASBOURG – Successful economic development has hewed to a well-known pattern. Lifting a country out of poverty and placing it on a path of sustainable growth requires hard work, the creation of a robust system of property rights, and – crucially – private investment.
This method is not specific to a particular region or people. As Asia’s spectacular growth has demonstrated, it is transferable across cultures. So it is a shame that development economists and the world’s multilateral institutions are failing to apply it systematically in the developing world.
Billions of dollars of aid has been poured into developing countries, but it has not been enough, and the results have been disappointing. The World Bank estimates that one billion people still live on less than $1.25 a day, while more than 800 million do not have enough to eat. The Millennium Development Goals attempted to apply a comprehensive approach to reducing poverty, but the MDGs failed to address its underlying causes.
On paper, at least, the United Nation’s new Sustainable Development Goals, put in place last year, are an improvement. The trouble is that lofty ambitions come with a high price tag, and there remains a funding gap of around $2.5 trillion if all 17 goals are to be met. A chasm this big cannot be bridged by cash-strapped governments and taxpayers alone.