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The mystery of development

Robert Cooper
  26th February 2006  —  Issue 119
2005 was a big year for international development. But there are strict limits on what outsiders can do to help poor countries. People develop themselves with the help of functioning legal systems and states

If governments live up to their promises, global aid volumes should rise to $125bn a year by 2010. The EU is committed to delivering half this increase to Africa. This can only be welcomed. But since we are now going to put so much more into development assistance, it is a good moment to ask what exactly development is and how this money can best be used.

The first thing to understand is that money does not make you developed; perhaps it does not even make you rich. If money brought development then Saudi Arabia and Angola would be developed countries. If money made a society—as opposed to a few individuals—rich then Nigeria would be rich. In the 16th and 17th centuries, Spain dug money out of the ground in Mexico and Peru, a process which seems to have marked the start of its decline rather than its modernisation. In this period of apparent riches it found itself instead defeated by the Netherlands, a poor country whose main asset was a determined and commercially minded people. The Dutch then went on to become one of the first modern countries and one of the great powers of the age.

It follows that development aid on its own will not make you developed. Is it possible to think of a single country where development aid has played a significant part in development? The explosive growth of China has little to do with the 0.1 per cent of its GNP that comes as foreign aid. Nor have receipts amounting to more than 50 per cent of GNP brought development to Mozambique or Sierra Leone.

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