The task force points out that lending will do little good, and will likely be counterproductive, if the overall policies of a country are inimical to growth. In general, economic progress requires a market-oriented policy environment, according to the report. The development banks themselves frequently make the same point, but, as the task force says, they often continue to lend to governments regardless of their economic policies. Other areas of general consensus include concern about the banks' unnecessary secrecy and empty promises of reform. Troublesome, however, is the recommendation for the continuation, or even expansion of the development banks' support for private ventures and free-market reforms in borrower countries.
Private capital flows now dwarf official aid flows to the developing world.
The report acknowledges that those flows and market-oriented development strategies suggest a declining role for the multilateral development banks. But it warns that only about a dozen developing countries receive the bulk of that private capital. That is precisely as it should be. Economic freedom, not misnamed foreign aid, is the answer to international poverty. Clearly, the ability to attract capital is determined by the type of policies and institutions a country embraces, not by outside aid.