This experience has been evident for quite some time. One does not need a Ph.D. in economics to note the differing levels of development in China and Taiwan, North and South Korea, or Asia and Latin America. Even government agencies occasionally have taken note. But still the ideological commitment to state-led development planning funded by the West remained in the academic and development communities. No longer, however.
Today there is no serious dispute that markets are required for growth.
There is growing agreement that assistance cannot buy market reforms. All that an increasingly beleaguered band of aid defenders now claim is that foreign assistance may be useful if extended to governments which have already adopted good economic policies. They created an index of 17 component parts to measure economic freedom, as well as three alternative summary indexes. Although international comparisons are fraught with difficulty, two particularly important lessons emerge. First, economic policies matter, with better policies yielding higher rates of growth.