Literacy and economic development have existed as terms that are inextricably linked in the literature, often with little examination. As one looks more closely at the rationales for this relationship, it becomes clear that much more needs to be known about the functions and uses of literacy in everyday life, how literacy is linked to productive activity, and how literacy is learned (and taught) across the life-span. In order to achieve both understanding and improved literacy programming, it is crucial that better methods of assessment and program evaluation be put into place. This paper reviews prior experience in assessment, with special attention to the use of literacy surveys, as well as some of the problems with international literacy statistics. The paper concludes with a discussion of innovations in literacy and policy alternatives in the year 2000 and beyond.