ABSTRACT
Resources for country development include domestic savings, foreign private capital, and foreign public assistance. In most development literature, far more attention is given to public assistance — the so-called official development assistance provided by bilateral and multilateral donors in the form of grants and loans — than its importance warrants. In 1980, the World Bank estimated that the total net inflow of capital, both public and private, amounted to $74.6 billion. Contrary to popular opinion, most external capital provided to developing countries comes from private sources. The other major source of capital for investment in developing countries is domestic savings. Gross domestic savings for low-income countries in 1980 was 18.7 percent of gross domestic production, or $48.3 billion; for middle-level countries, gross domestic savings amounted to 23.2 percent of GDP or $253.1 billion. From 1956 to 1975 military expenditures have increased globally at almost 3 percent per annum. During this period the distribution of defense spending altered substantially.
