Escaping Poverty

Foreign Aid, Private Property, and Economics Development

Originally published in Journal of Private Enterprise

P.T. Bauer boldly conjectured two hypotheses about the process of escaping poverty. First, he argued that foreign aid not only fails to promote economic progress, but may actually retard this process. Second, Bauer argued that private property rights are necessary and sufficient for economic development.

P.T. Bauer boldly conjectured two hypotheses about the process of escaping poverty. First, he argued that foreign aid not only fails to promote economic progress, but may actually retard this process. Second, Bauer argued that private property rights are necessary and sufficient for economic development.

This paper evaluates both of Bauer's controversial claims. First, it considers the theoretical mechanisms through which aid might depress recipient-country development and examine the empirical evidence that addresses this hypothesis. Second, the paper theoretically investigate the role of private property in economic development and examine the evidence for Bauer's claim regarding the primacy of private property.  This analysis finds support for both of Bauer's provocative hypotheses and suggests that his work anticipated the most important results in the contemporary field of economic development.

Read the article at the Journal of Private Enterprise.

Citation (Chicago Style): Leeson, Peter. "Escaping Poverty: Foreign Aid, Private Property, and Economics Development." Journal of Private Enterprise 23, no. 2 (2008): 39-64.

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