PurposeThis paper, which builds on the findings of WHO's Report on Mental Health and Development, aims to highlight the health, social, economic, and human rights effects of unaddressed mental disorders in low and middle income countries (LMICs) and to propose effective strategies to address mental disorders and their impacts as part of an overall development strategy.Design/methodology/approachThe paper first reviews the findings of relevant research on mental disorders and poverty and then proposes solutions that can be adopted by countries to promote development.FindingsThis evidence of strong links between poverty and mental disorder supports the argument that mental disorders should be an important concern for development strategies. Mental disorders have diverse and far‐reaching social impacts, including homelessness, higher rates of imprisonment, poor educational opportunities and outcomes, lack of employment and reduced income. Targeted poverty alleviation programmes are needed to break the cycle between mental illness and poverty. These must include measures specifically addressing the needs of people with mental health conditions, such as the provision of accessible and effective services and support, facilitation of education, employment opportunities and housing, and enforcement of human rights protection.Originality/valueThe paper highlights that four out of every five people suffering from mental disorders are living in LMICs. Many LMICs have identified mental health as an important issue, yet lack the finances and technical expertise to address the problem. Having mental health on the agenda of development organizations will be a critical step for overcoming the negative development consequences of mental disorders.