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EU aid for ACP investment

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  • Wolf, Susanna
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    Abstract

    The partnership between the EU and the ACP countries (that include 38 of the world?s 49 least developed countries) has a long standing history and was renewed in 2000 with the Cotonou Agreement. Furthermore, the European Commission has become the world?s fifth largest donor of development aid - and therefore one of the most important - in the 1990?s. When total aid is looked at the ACP countries are disproportionally among those receiving the most foreign aid per capita in the world and hence the effects of European aid are of special relevance for them. The aim of this paper is therefore to investigate the effect European aid has on investment in the ACP countries. It contributes to the ongoing debate on aid effectiveness by arguing that the impact f aid does not only depend on the characteristics of the recipient but also of the donor. The EU-ACP Partnership Agreement could increase incentives for private investment in the ACP countries either through direct support measures or more indirectly through complementary spending for infrastructure and administration. The special private sector chapter in the Cotonou Agreement makes it visible that private sector support is a primary objective and brings the existing provisions into a more coherent and refined framework. However, given the limited funds that were available under the Lomé Conventions direct investment support cannot be expected to increase total investment considerably. The empirical findings show that total aid has a positive but declining effect on the share of gross domestic investment in GDP. The effect of aid from the European Commission on gross domestic investment seems to be smaller partly due to its allocation towards ACP countries with a relatively poor investment performance. -- Die Partnerschaft zwischen EU und AKP-Staaten (von denen 38 zu den 49 am wenigsten entwickelten Ländern gehören) hat eine langjährige Geschichte und wurde im Jahre 2000 mit dem Cotonou Abkommen erneuert. Zudem hat sich die Europäische Kommission in den 90er Jahren zum fünftgrößten Geber von Entwicklungshilfe in der Welt entwickelt. Die AKP-Staaten liegen bei Betrachtung der Gesamthilfe überproportional unter denen, welche die meiste Entwicklungshilfe pro Kopf in der Welt erhalten. Es werden daher die Auswirkungen der EU-Hilfe insbesondere auf die Investitionen in den AKP Staaten untersucht. Damit wird ein Beitrag zu der gegenwärtigen Debatte über die Wirksamkeit von Entwicklungshilfe geleistet. Es wird argumentiert dass die Wirksamkeit von Hilfe nicht nur von den Gegebenheiten im Empfängerland, sonder auch vom Geber abhängt. Das Abkommen von Cotonou soll die Anreize für Privatinvestitionen in den AKP-Staaten steigern, entweder durch direkte Förderungsmaßnahmen oder indirekt durch ergänzende Ausgaben für Infrastruktur und Administration. Das Sonderkapitel über den Privatsektor im Cotonou-Abkommen macht deutlich, dass die Unterstützung des privaten Sektors ein primäres Ziel ist und bringt die bestehenden Bestimmungen in einen kohärenten und verbesserten Rahmen. Einer der Schwerpunktsektoren ist daher die Förderung von Investitionen und privatem Sektor. Bei den begrenzten Geldmitteln, die durch die Lomé-Abkommen verfügbar waren, kann allerdings nicht erwartet werden, dass die Förderung direkter Investitionen die Gesamtinvestitionen wesentlich steigert. Die empirischen Ergebnisse zeigen, dass die Gesamthilfe einen positiven, aber sinkenden Einfluss auf den Anteil der inländischen Investitionen am BSP hat. Die Auswirkungen der EU-Hilfe auf Investitionen in den AKP Staaten sind weniger stark. Dies kann insbesondere auf die stärkere Ausrichtung der EU-Zusammenarbeit auf die AKP Staaten mit schlechteren allgemeinen Investitionsbedingungen zurückgeführt werden.

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    Bibliographic Info

    Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 192.

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    Date of creation: 2002
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    Handle: RePEc:zbw:hwwadp:26129

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    1. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 114(496), pages F191-F216, 06.
    2. Robert Lensink & Oliver Morrissey, 2000. "Aid instability as a measure of uncertainty and the positive impact of aid on growth," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 36(3), pages 31-49.
    3. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 847-868, September.
    4. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, Elsevier, vol. 64(2), pages 547-570, April.
    5. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, Elsevier, vol. 40(2), pages 289-329, February.
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