POLI 358 Lecture Notes - Lecture 20: Aid Effectiveness, Jeffrey Sachs, Dutch Disease
26 Apr 2019
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Lecture 19: the world bank, aid and development. Private aid: cooperation between donor and recipients, most of the aid was allocated directly by countries, also allocate aid through ngo, international organizations and private firms- underwhelming results for state to state aid. Bilateral aid delivered from states to states: aid and economic growth. Aid is the only way to reduce the income gap and escape the poverty trap. Ldcs have a chronic saving problem- cant save cant invest -- > economy slows down. Easterly: aid goes into consumption- over value currency- exports becomes less competitive (dutch disease)- aid is not good. Bilateral aid delivered from states to states: aid and economic growth, aid allocation, why countries allocate aid and to which counties. Selectorate theories- aid is allocated to authoritarian regimes. At the margin, aid matters, but because there are perverse incentives to allocate money, aid effectiveness is low.
