Can foreign aid buy growth?. Rochelle Harrison Matthew Plant Hamidat Popoola Senyo Aidam Sikander Singh Chahal Tameena Hira. The effects of corruption and foreign aid on developing countries. 2007 Foreign Aid contribution UK and N.Ireland. £6,299,418,300. The Reality….
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Can foreign aid buy growth? Rochelle Harrison Matthew Plant HamidatPopoola SenyoAidam Sikander Singh Chahal TameenaHira The effects of corruption and foreign aid on developing countries
2007 Foreign Aid contribution UK and N.Ireland £6,299,418,300
The Reality… • "Between 1970 and 1998, when aid flows to Africa were at their peek, poverty in Africa rose from 11% to a staggering 66%" -Dambisa Moyo, Dead Aid
Can Foreign Aid Buy Growth? - Easterly • William Easterly (2003) • “Financing Gap” • Burnside and Dollar's Aid, Policies and Growth (2000) • Flaws? • “The Big Idea” • A Real World Perspective
Corruption and Development - Pranab Bardhan • 1. Good policies do not necessarily have to be moral. • 2. The only thing worse than a rigid over centralised DISHONEST bureaucratic government is a rigid over-centralised HONEST one' • -Samuel P. Huntington • 3. The concept of Speed Money • 4. Misuse of foreign Aid policy
Resources and Incentives to Reform A Model and some evidence on sub Saharan African countries • Low rates of investment and growth can be due to poor infrastructure, bad policies and institutions. • The ruling elite will implement "bad policies" to sustain their position where aid can become ineffectual. • The proposed Model… • A self interested government concerned with : • a) the welfare of its supporters b) society's welfare as a whole. • Conclusion: aid should be conditional
To what extent does policy in government influence the effectiveness of foreign aid? The Question and Verdict...