6.7.6.3 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 the developed world to buy from them and invest in them. That need gives the governments of wealthy countries leverage:
● As mentioned above (6.7.6.1), they can put preconditions on the giving of aid.
● They can apply economic sanctions (3.3.7.2), although these impose a cost on both buyer and seller. They could refuse to buy natural resources from countries where the proceeds would be used to prop up an oppressive regime for example.
● They could refuse to lend money to dictators.
● They could refuse to allow their banks to accept embezzled funds.
These are all examples of incentives to develop the necessary governance. Coordinated political support would be needed in the affluent countries to implement these policies and make them successful. Developing countries that reform can grow faster, so that they can afford to buy more from the developed world.
This page is part of Edition 4 of the Patterns of Power series of books. An archived copy of it is held at https://www.patternsofpower.org/edition04/6763a.htm.