Economic development is one of the most basic goals of all societies in our time. Economic development means raising living standards and eliminating poverty. The need for economic development is particularly acute in poor countries. Improvements in basic health care have led to an explosion of population for which jobs and a basic minimum standard of living must be created. Governments are expected to be able to produce development and are held accountable if they fail.

There are many alternative ways to achieve economic development, and not one of them is easy. All involve significant sacrifice by the present generations for their children. That is because development requires capital formation, which in turn requires saving. If a society wishes to increase its growth rate, it must find a way of increasing saving. Some group or groups must be induced or even forced to set aside from their income a surplus above consumption. The question facing a society that wishes to grow is: How can this required saving be squeezed out of national income? The poorer the society, the more difficult it is likely to be to find and to mobilize any such surplus for development.

The developing world is a laboratory of alternative approaches to this basic development problem. Each country is like a separate experiment. Each has organized its economic, political, and social life in a certain way.