During the 19th century it became increasingly clear to Western
economists (and at least some statesmen) that genuine wealth did not
come from the exploitation of colonial resources and markets, but
from increased production made possible by education, technological
innovation, specialization and trade. In time, this recognition
raised the revolutionary idea that wealthy, advanced nations had an
enlightened self-interest in helping poorer nations to thrive
materially. This idea, which in due course was assimilated into the
Wilsonian pantheon of political virtue that makes up democratic peace
theory, has taken on special significance since September 11 of last
year. Now nation-building, and the sine qua non of economic
development that is the precondition for it, are recognized almost
universally as security issues. Unfortunately, we do not do these
things well.
Despite--or perhaps because of--the existence of several large
professional bureaucracies whose very raison d'être is to work the
foreign poverty problem, no professional consensus exists to explain
why some countries succeed and others fail to grow. This lack of
consensus is reflected in the record of the many methods that have
been tried, discarded, combined, recombined and recycled over the
years: free trade, direct aid, technology transfer, infrastructure
support, foreign direct investment, technical assistance for
institutional reform, and so on. All this is despite the fact that
over the past half century there have been three phases of assisted
economic development in U.S. foreign policy from which to draw
lessons.
