Advanced Search
MyIDEAS: Login

Africa: Is Aid an Answer?

Contents:

Author Info

  • Caucutt Elizabeth M

    () (University of Western Ontario)

  • Kumar Krishna B.

    () (RAND Graduate School of Policy Studies)

Abstract

We address the poverty trap rationale for aid to Africa. We calibrate models that embody typical explanations for stagnation: coordination failures, ineffective mix of occupational choices and imperfect capital markets, and insufficient human capital accumulation coupled with high fertility. Calibration is ideally suited for this evaluation given the paucity of high-quality data, the high degree of model nonlinearity, and the need for conducting counterfactual policy experiments. We find that calibrations that yield multiple equilibria -- one being prosperity and the other stagnation -- are not particularly robust in capturing the African situation. This tempers optimism about foreign aid typically prescribed based on models of multiplicity. Moreover, conditional on multiplicity, the calibrated models indicate that the cost of policy interventions needed to trigger development in stagnant economies is small. The lack of reforms in Africa, despite the low estimated costs, suggests political hurdles to reform. It is not clear that foreign aid would be able to circumvent these. Taken together, we conclude that the case for foreign aid to Africa is weak.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.degruyter.com/view/j/bejm.2008.8.1/bejm.2008.8.1.1761/bejm.2008.8.1.1761.xml?format=INT
Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.

Volume (Year): 8 (2008)
Issue (Month): 1 (December)
Pages: 1-48

as in new window
Handle: RePEc:bpj:bejmac:v:8:y:2008:i:1:n:32

Contact details of provider:
Web page: http://www.degruyter.com

Order Information:
Web: http://www.degruyter.com/view/j/bejm

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Chris Papageorgiou & Fidel Pérez Sebastián & Shankha Chakraborty, 2010. "Diseases, infection dynamics and development," Working Papers. Serie AD 2010-28, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Keith Blackburn & Gonzalo F. Forgues-Puccio, 2011. "Foreign aid - a fillip for development or a fuel for corruption?," Centre for Growth and Business Cycle Research Discussion Paper Series 158, Economics, The Univeristy of Manchester.
  3. Elisabeth Caucutt & Krishna B. Kumar, 2007. "Education For All: A Welfare-Improving Course for Africa?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(2), pages 294-326, April.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bpj:bejmac:v:8:y:2008:i:1:n:32

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.