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This technical report is an analysis of current trends and theories in consumer protection from both a legal and economic perspective. Traditional economic theory, especially the work of Akerlof (1970), suggests there are situations in which consumer protection is necessary to maintain healthy markets. Still, debate continues on the best methods of consumer protection. As an example, some economists argue for information disclosure, others paternalism, and still others so-called soft- or libertarian-paternalism. Any of these forms can be acheived through different bodies including government agencies, consumer associations, self-regulation, statutory and non-statutory standards bodies, ombudsman and professional organizations. Finally, the transition to digital economies has presented new challenges for consumer protection including security, privacy, complex liability chains, and the complexity of the products themselves.
Donor countries and multilateral organizations may pursue multiple goals with foreign aid, including supporting low-income country development for strategic/security purposes (national security, regional political stability) and for short-and long-term economic interests (market development and access, local and regional market stability). While the literature on the effectiveness of aid in supporting progress on different indicators of country development is inconclusive, donors are interested in evidence that aid funding is not permanent but rather contributes to a process by which recipient countries develop to a point that they are economically self-sufficient. In this report, we review the literature on measures of country self-sufficiency and descriptive evidence from illustrative case studies to explore conditions associated with transitions toward self-sufficiency in certain contexts.