This is an archived USAID document retained on this web site as a matter of public record.

Driving economic growth

>> Foreign Aid in the National Interest >> Overview >> Driving economic growth

Acknowledgements Foreword Overview: Promoting Freedom, Security and Opportunity Chapter 1: Promoting Democratic Governance Chapter 2: Driving Economic Growth Chapter 3: Improving People's Health Chapter 4: Mitigating and Managing Conflict Chapter 5: Providing Humanitarian Aid Chapter 6: The Full Measure of Foreign Aid Last updated: 35     Jump to Overview Sections: >> 50 years of development gains >> Promoting democratic governance >> Driving economic growth >> Improving people's health >> Mitigating and managing conflict >> Providing humanitarian assistance >> The full measure of U.S. development assistance-official and private >> Notes >> Background papers >> References Growth is good for the poor The importance of market exchange illuminates the role of governance in both causing and alleviating poverty. Bad governance results in poorly defined property rights, high transaction costs, large economic risks, and outright theft. Markets disappear in such environments-and with them poor people's hopes for an escape from poverty. Other factors affecting poverty are visible but hard to incorporate in general models of development. Cultural and religious values are often high on the list: attitudes, mistrust, traditions, religious outlooks, preferences for leisure, and viewing economic success negatively can impede rapid change. Important research, now under way, will define more precisely the relationship between a country's value system and its level of development. The research suggests how and why value systems evolve-and the measures countries might take to strengthen values that encourage development and alter those that undermine it. Agricultural growth is even better In recent years many economists have ignored agriculture, arguing that market forces will favor whatever sectors are appropriate. In addition, agriculture plays a shrinking role as economies make the structural transformation to urbanbased activities and to industry and services. But in many economies agriculture connects poor people to economic growth. Most of the world's poor people live in or come from rural areas. page 3

:  :  :  :  :  :  :  :  :  :  What's New : FOIA Requests : Privacy Policy : Email This Page : Plug-ins : FAQs : Help Desk : Contact Us : Site Map Last Updated on: October 07, 2009