Economic Development through Private Enterprise

More rapid economic development for the less developed areas of the world is something which most of us in the United States want very much. We want it for humanitarian reasons and we want it because we believe it is in our national interest. There is, therefore, great public concern about our programs of assistance to developing areas, and in recent months there has been considerable discussion of the appropriate roles of public assistance and private international investment in contributing to economic development. These are important issues; but it is also important to keep them in perspective. What developing countries do for themselves is more important than what others do for them. In the majority of developing countries the adoption of a framework of law and regulations conducive to the full use by their citizens of productive resources that already exist would probably make a greater contribution toward their development than is now provided by all external assistance from both public and private sources.

It could be that in some countries nothing short of the shock of the cessation of all forms of external assistance will lead to a reconsideration of present policies inhibiting economic growth. Such a suspension of aid is not, of course, likely. Normally, measures to encourage the productive use of domestic resources serve also to attract private investment from abroad, and increasingly the national and international aid agencies are conditioning their programs of aid on the adoption by the receiving countries of constructive measures of self-help.