Loomnie

Based on a thorough review of the professional research literature and a re-examination of key hypotheses, our answer is “yes”.

That is from Channing Arndt, Sam Jones, and  Finn Tarp, all of University of Copenhagen. They continue:

Our study represents the most carefully developed empirical strategy employed in the aid-growth literature to date. The results provide solid support for the view that the effect of aid on growth is positive in the long run. In sum, our findings suggest that an inflow on the order of 10 percent of GDP spurs the per capita growth rate by more than one percentage point per annum in the long run. These estimates are consistent with the view that foreign aid stimulates aggregate investment and may also contribute to productivity growth, despite some fraction of aid being allocated to consumption.

The bleak pessimism of much of the recent aid-growth literature is unjustified and the associated policy implications drawn from this literature are often inappropriate and unhelpful. Aid has been and remains an important tool for enhancing the development prospects of poor nations.

Read it in full at the website of the Nordic Africa Institute.

H/T Onafrica

From NEXT:

A study by the USAID on the West Africa Trade Hub has revealed that the region’s transport costs is the highest in the world and remains so because the trucking market in the region is highly regulated.

“The regulationof the industry deter competition that would go a long way toward reducing transport costs” stated the transport advisor at the USAID Trade Hub and co-author of the study; Andy Cook with another internationally recognized transport expert; Sadok Zerelli. “The study confirms what many have suspected about the West African trucking market” the reported affirmed, noting that reducing costs of transport is key to ensuring regional food security.

I thought to draw attention to Jeffrey Sachs comments on Dambisa Moyo’s Dead Aid, and Ms Moyo’s response. Mr Sachs’s comments were a bit disapointing. I have expected more in substance from him. Read the opening, for instance:

The debate about foreign aid has become farcical. The big opponents of aid today are Dambisa Moyo, an African-born economist who reportedly received scholarships so that she could go to Harvard and Oxford but sees nothing wrong with denying $10 in aid to an African child for an anti-malaria bed net. Her colleague in opposing aid, Bill Easterly, received large-scale government support from the National Science Foundation for his own graduate training.

I certainly don’t begrudge any of them the help that they got. Far from it. I believe in this kind of help. And I’d find Moyo’s views cruel and mistaken even she did not get the scholarships that have been reported (Easterly mentioned his receipt of NSF support in the same book in which he denounces aid). I begrudge them trying to pull up the ladder for those still left behind. Before peddling their simplistic concoction of free markets and self-help, they and we should think about the realities of life, in which all of us need help at some time or other and in countless ways, and even more importantly we should think about the life-and-death consequences for impoverished people who are denied that help.

Kind of bellow the belt, don’t you think?

My copy of the book should arrive today.

I just read this on the CNN website:

Too much money meant for Afghanistan aid is wasted, with a vast amount spent on foreign workers’ high salaries, security and living arrangements, according to a report from humanitarian groups published Tuesday.

And this:

The cost of a full-time expatriate consultant working in Afghanistan is around $250,000, according to the group. This is some 200 times the average annual salary of an Afghan civil servant, who is paid less than $1,000 per year, the report said.

And I couldn’t help wondering why anybody is surprised.

The full report is here.