Owen Barder has written a great post on the difference between aid and development policy – between providing temporary alleviation from the worst effects of poverty, and supporting structural transformation.
Aid is best-suited to poverty alleviation, and other “beyond aid” policies such as trade, security and migration are more suited to transformational development.
Hilary Myers mentioned one of these “beyond-aid” issues on this blog: cracking down on tax havens, improving transparency and tackling corruption – particularly by making it harder for western banks and financial institutions to facilitate that corruption.
How important are these illicit financial flows out of developing countries? Derrill Watson draws my attention to these figures from the Global Financial Integrity Programme of the Center for International Policy.