Development economics seeks to discover why some regions have prospered while others have been stuck in a vicious cycle of poverty. The importance of this issue cannot be underestimated. Several generations after the industrial revolution arrived in the West, hundreds of millions of people around the world continue to live in extreme poverty, with little or no access to economic opportunities or even the most basic necessities.
Recent measures of global inequality have reached new heights, leading some to argue that the rich countries have developed at the expense of the underdeveloped world and to push for a redistribution of wealth on a global scale. This view not only misdiagnoses the problem, but also prescribes the wrong medicine. Decades of Western development assistance to the poorest countries have tended to promote dependency and corruption, rather than productive entrepreneurship and widespread prosperity. Experience also shows that when governments respect economic freedom, property rights and the rule of law, and remain at peace with other governments, it fosters an environment conducive to material progress.
Fellows of the Independent Institute have examined economic development in Asia, Africa and Latin America in numerous books, journal articles, editorials, and public appearances. Their findings can be summarized in a few basic principles: (1) Market prices and profit and loss incentives are more conducive to economic growth in developing countries than centralized control and government-to-government assistance. (2) The removal of barriers to international trade allows workers and entrepreneurs to make the best use of their comparative advantage. (3) Free markets, respect for individual liberty and the enforcement of private property rights not only promote business entrepreneurship and economic progress, but also the growth of charitable institutions, a strong civil society and social progress. .