computing costs are transforming distance and eroding borders and time, but the fact remains that people still lack basic, life-saving knowledge because simple information does not flow as readily as one would hope.This year's Report, the twenty-first in this annual series, examines the role of knowledge in advancing economic and social well being. It proposes that we step back from the familiar problems of development and consider them from a fresh, new perspective: the perspective of knowledge. In studying these issues, the Report considers two sorts of knowledge: how-to knowledge (farming, health or accounting) and knowledge about attributes (the quality of a product, credibility of a borrower, or the diligence of an employee). The Report suggests three lessons that are particularly important to the welfare of the billions of people living in developing countries. First, developing countries must institute policies that will enable them to narrow the knowledge gaps that separate poor countries from rich countries. Second, developing country governments, multilateral institutions, non-governmental organizations and the private sector must work together to strengthen the institutions needed to address information problems. Finally, no matter how effective these endeavors are, problems with knowledge will persist, but by recognizing that knowledge is at the core of all our development effort, unexpected solutions to seemingly intractable problems will be discovered.

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