Aid and Growth

Raghuram Rajan writes:

While no one has the "magic bullet" for growth, there are some things that do seem important. These include sensible macroeconomic management, with fiscal discipline, moderate inflation, and a reasonably competitive exchange rate; laws and policies that create an environment conducive to private sector activity with low transaction costs; and an economy open for international trade. In addition, investments in health and education—which create a population that not only lives a better life but also sees opportunities in growth and competition—ought to be encouraged.