If we are to help developing nations prosper, we must find a method that creates a bigger role for institutions such as the market. One way of aiding Third World nations is through free trade. By lowering our import barriers, we can allow the private sectors of the Third World easier access to our markets. With the huge markets of the United States available for their products, entrepreneurs will have the opportunity to develop new industries or expand old ones. As for economic development, the West can best promote this by the reduction of its often severe barriers to imports from poor countries.
External commerce is an effective stimulus to economic progress.
It is commercial intercourse with the West which has transformed economic life in the Far East, South-East Asia, and parts of Africa and Latin America. 25 Free trade also has the advantage of helping our own economy. While this is no place to explode the numerous protectionist fallacies, free trade will increase our wealth with a great influx of goods and services from abroad. Foreign aid fails as a development policy because it destroys the incentives of the marketplace and extends the power of ruling elites. Because it leads the Third World away from the free market, it actually increases Third World poverty.