Incentives to Develop the Necessary Governance

Affluent countries that are dealing with developing countries can offer them incentives to develop the necessary governance

Developing countries need assistance from the rest of the world, in the form of buying from them and investing in them.  This enables them to put financial pressure on local politicians:

●  As mentioned above (, they can put preconditions on the giving of aid.

●  They could refuse to buy natural resources from countries where the proceeds would be used to prop up an oppressive regime.

●  They could refuse to lend money to dictators (bearing in mind that the population would end up repaying the loan).

●  They could refuse to allow their banks to accept embezzled funds.

●  They could prevent multinational companies from transferring profits to tax havens to avoid paying tax in developing countries.

Wealthy countries could offer more incentives to develop the necessary governance if they were to buy more from them.  This is not straightforward, though, because they would first have to remove the tariff barriers against imports of food (  This would require national politicians in wealthy countries to persuade their populations of the benefits: cheaper food for themselves and a better form of assistance than aid for helping people in poorer countries.

These are all examples of economic regulations which could be introduced to help developing countries.  Coordinated political support would be needed in the affluent countries to implement these policies and make them successful.



This page is intended to form part of Edition 4 of the Patterns of Power series of books.  An archived copy of it is held at https://www.patternsofpower.org/edition04/6763.htm.