The prevailing orthodoxy when it comes to helping the poor has boiled down to a catchphrase: Give adequate resources to those with inadequate resources.

In our experience, however, flooding a country with financial aid reduces, and sometimes voids, the incentives to find innovative solutions to overcoming resource constraints.

Afghanistan, for instance, has proved a dismal failure in development, despite an investment of some $20 billion in development funds. Sure, the numbers per capita...


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