Cure World Poverty by Promoting Economic Growth

The Emirates Economist posts that, contrary to the beliefs of the organizers of Live-8,

Aid can relieve immediate suffering, but it does not spur growth. And it is economic growth that has been a lasting solution to poverty.

He links to a piece in the Financial Times that cites studies by the IMF and the World Bank.

The International Monetary Fund has warned that governments, donors, campaigners and pop stars need to be far more modest in their claims that increased aid will solve Africa's problems.

Days before the Live-8 concerts around the world, and next week's Group of Eight countries summit in Scotland, the IMF has released two extensive research papers that suggest aid flows to poor countries have not led to higher growth rates, the main driver of poverty reduction.

“We need to be careful given the chequered history of aid, that we do not place more hopes on aid as an instrument of development than it is capable of delivering,” the fund said.
The research, which took into account duration, type of donor and governance record of recipient, found aid did not boost growth. [emphasis added]