Closing development gaps : challenges and policy options

There are significant income and nonincome development gaps around theworld. Closing these gaps will require not only increasing and sustainingeconomic growth in low-income regions, but also policies that closenonincome development gaps directly. Governments need to support privateinvestment and entrepreneurship by investing in human capital andinfrastructure; developing the financial sector; improving governance; andeliminating other impediments created by market, institutional, or policyfailures. Policy makers should improve access to and quality of health,education, and other social services. This means better targeting and increasedpublic spending on social services that directly benefit the poor; innovativedelivery mechanisms informed by rigorous evaluation; and social protectionsystems. The experience of developing Asia and others has shown thatexternal trade and finance - including foreign direct investment, remittances,and aid - play a critical role. It is therefore imperative that governmentscontinue to promote globalization and regional integration. (Asian Dev Rev/GIGA)