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Most important of all, the less developed countries must be persuaded to take the necessary steps to allocate and commit their own resources.

They must be induced to establish the necessary tax, fiscal, monetary, and regulatory policies.

They must be persuaded to adopt the other necessary self-help measures which are described in the preceding section.

The taking of these steps involves tough internal policy decisions.

Moreover, once these steps are taken, they may require years to make themselves felt.

They must, therefore, be related to long-range development plans.

3.

Providing an incentive

If the less developed countries are to be persuaded to adopt a long-term approach, the United States, as the principal supplier of external aid, must be prepared to give long-term commitments.

In this, as in so many aspects of our development assistance activities, the incentive effects of the posture we take are the most important ones.

The extent to which we can persuade the less developed countries to appraise their own resources, to set targets toward which they should be working, to establish in the light of this forward perspective the most urgent priorities for their immediate attention, and to do the other things which they must do to help themselves, all on a realistic long-term basis, will depend importantly on the incentives we place before them.

If they feel that we are taking a long-term view of their problems and are prepared to enter into reasonably long-term association with them in their development activities, they will be much more likely to undertake the difficult tasks required.

Perhaps the most important incentive for them will be clear evidence that where other countries have done this kind of home work we have responded with long-term commitments.