Trouble is, India also has the Bimaru states in the north and east. Light sadly does not travel with the ease the WDR assumes. The spread of knowledge is, alas, not neutral to power relations. The second area where knowledge bears fruit is in improving the functioning of markets for credit, housing, land, etc. This is a truism, for markets are the interplay of information. But the WDR's focus in this regard is on public good: the example it cites is knowledge of improved quality boosting the demand for milk. But besides knowledge of adulteration, which held down demand, it was the suppliers' decision to desist from dilution in the wake of anincrease in milk supply that made a difference. Knowledge is important ,but so is investment. WDR's point is that education is a critical determinant of growth. It shows how in forty years Korea boosted its per-capita income to an enviable level by boosting education. Korea had universal primary education by 1960. It thus created a well-educated labour force. Korea invested heavily in higher education; in 1995, a half of college-age adults enrolled in a college or university. Thus investment in human capital fuelled investment in industry. India, plagued by slow investment growth, saw its educated migrate. It has been unable to absorb educated and skilled manpower. Inadequate human development can retard growth; but slow investment growth creates a redundant pool of educated unemployed. The most important point of the WDR is that poor countries differ from rich ones not only because they have less capital but because they have less knowledge.

Rich countries have a massive capacity to createknowledge: their R&D spending per capita is $218 against $1 in low-income countries excluding China. This should spur developing countries, WDR advises, to pursue on open trading regime, foreign investment and technology licensing. This will flood in technology from the rich countries. Developing countries must accept the trend towards stronger intellectual property rights even though this shifts bargaining power towards producers of knowledge and slows the rate of adaptation, thus widening the knowledge gap. There is no point in blaming the WDR for being candid. Developing countries must learn to beat second best options.