That's allowed them to invest in infrastructure and social services. How governments spend their money matters as much as what they spend it on. Instability and unpredictability in government expenditures make progress in poverty reduction more difficult. The quality of people that governments recruit also makes a difference. Governments that hire and promote based on merit perform better than those that give the best jobs to friends and political allies.
External aid plays an important part in supporting development, especially in poor countries.
Donors and international financial institutions are now working more closely with developing countries on strategies for poverty reduction, formulated through a participatory process and driven by countries. They are also being more selective in the kind of aid that goes to a country, better ensuring that it is tailored to country priorities and local needs. Donors realise the need to build strategic partnerships that capitalise on each partner's intrinsic strengths, reflect shared goals and objectives and build on existing achievements. Working in partnership with developing countries, the high-income countries need to supply more aid. They also need to provide more and faster debt relief.