Dear WSJ: Foreign Aid is Not the Answer

Editor, The Wall Street Journal

200 Liberty Street

New York, NY 10281

To the Editor:

Madeleine Albright and Colin Powell are pleased that, at the Initiative for Global Development (IGD) summit in Washington, "business and government leaders will gather to advance new strategies for reducing global poverty. Participants will focus on ways to promote better public policies, and to integrate the best practices of business and government in order to lift up the lives of the world's poorest people through economic growth" ("Don't Forget About Foreign Aid [1]," May 5).

Wonderful words. But they offer no hint that these former Secretaries of State are aware of the researches of Peter Bauer and, more recently, of William Easterly. Bauer and Easterly show – with compelling arguments and data – that nations lift themselves out of poverty by relying neither upon foreign "aid" nor upon development blueprints drawn up and superintended by "experts" and "leaders." Rather, nations become wealthier only by creating secure property rights enabling countless individuals to experiment with new enterprises aimed at satisfying consumers.

In short, the key to development is freer markets – not top-down do-goodism of the sort that apparently will be offered at the IGD summit.

Sincerely,

Donald J. Boudreaux

Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.