The Search for the Key: Aid, Investment and Policies in Africa

Posted: 29 Feb 2008

See all articles by William Easterly

William Easterly

New York University - Department of Economics

David Dollar

World Bank - Development Economics Group (DEC)

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Abstract

The traditional aid-to-investment-to growth linkages are not very robust, especially for African economies. Aid does not necessarily finance investment and investment does not necessarily promote growth. Differences in economic policy, on the other hand, can explain much of the difference in growth performances. Furthermore, domestic politics rather than aid or conditionality has been the main determinant of policy reform. Where societies and governments have succeeded in putting growth-enhancing policies into place, aid has provided useful support. The combination of good policies and aid has created a productive environment for private investment and growth.

Suggested Citation

Easterly, William and Dollar, David, The Search for the Key: Aid, Investment and Policies in Africa. Journal of African Economies, Vol. 8, Issue 4, pp. 546-577, 1999. Available at SSRN: https://ssrn.com/abstract=915101

William Easterly

New York University - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

David Dollar (Contact Author)

World Bank - Development Economics Group (DEC) ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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