Working Papers in Economics
Can Aid Generate Growth in Africa?
Abstract: The paper discusses the impact of foreign aid on economic
growth in Africa. After brief discussion about growth determinants it goes
on to review the available evidence about the impact of aid on African
economic growth. Evidence from both cross-country regressions and country
studies is considered, and issues relating to economic policy, governance,
ownership, and sustainability are identified as particularly important.
Given those insights, some general conclusions are drawn as to what type of
aid should be given. However, the main focus is on a discussion about how
to structure the aid relationship so that it encourages good governance,
which is deemed essential for long-term growth. Donors should delegate more
responsibility to the recipients, while at the same time creating an
incentive structure for good performance. This would include among other
things a shift towards ex post conditionality and aid allocation according
to performance. Given the improvements in the economic policy environment
in Africa, the prospects for effective aid look more promising than they
have for a long time.
Keywords: Aid; Growth; Africa; (follow links to similar papers)
JEL-Codes: O19; (follow links to similar papers)
23 pages, May 15, 1998
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- This paper is published as:
Bigsten, Arne, (1999), 'Can Aid Generate Growth in Africa?' in Gupta, Kanhaya L. (ed.) Foreign Aid: New Perspectives, Recent Economic Thought, Vol. 68, chapter Can Aid Generate Economic Growth in Africa?, Kluwer Academic Publishers, Boston, ISBN 0-7923-8404-0.
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