The Role of Private Capital in Developing the Third World
It is obvious to all that the incomes of the poor people of this world could be increased if they had more capital and know-how with which to work. But the absurdity of an argument that aid somehow, pays for itself is revealed by the fact that private merchants or manufacturers give only samples to their customers; aid to develop their customers is not part of their marketing strategy. The major source of resources that has been less than fully exploited is the multinational corporation. The capital and money markets of many of the poor countries are sorely underdeveloped; the presence of more bank and nonbank financial institutions would help to relieve the glaring defects in the mechanisms for allocating scarce capital within those countries. Benjamin Franklin obviously did not perceive the value of capital markets. Unfortunately, the poor countries have not taken full advantage of the international capital market, which has grown rapidly in the 1970s.