While your solution is valid, those that are higher up in the goverment in 3rd world countries ( they need not be 3rd world anyways ) are usually but not always corupt to begin with. With this they would funnel the money and do other things with it, instead of providing for the people of there country.

Not all Governments will do this, there will be some who actually use the money to help the poor and provide better oppurtunities to those who otherwise would not have them.