Development co-operation shall be interpreted as any inter-and intrastate allocation of resources (financial, technological, science-related), which aims at the improvement of the present and future living conditions of the poor and disadvantaged. This extended definition comprises publicly provided resources as well as those, which - stimulated by development policy -are mobilized within a country. The necessity of establishing priorities in development co-operation has been reinforced. In order to prevent that development cooperation simply follows policy fashions, criteria are needed for priority setting. Normative criteria for priorities are comparative advantages, complementarity and subsidiarity. Development co-operation should concentrate on fostering democratic structures and the rule of law in developing countries; work towards weakening the conflict potentials between trade and environment and trade and development, respectively by means of bilateral or multilateral co-operation; promote research and the transfer of available knowledge and technologies, which serve the reduction of poverty; and utilize and support the possibility, that independent organizations offer services, for which state and market can only offer sub-optimal solutions, especially in rural areas where most of the poor live.