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The Macroeconomics of Doubling Aid to Africa and the Centrality of the Supply Side

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  • Tony Killick
  • Mick Foster

Abstract

The proposed doubling of aid to Africa by 2010 is a less simple proposition, from a recipient point of view, than is commonly supposed. This article argues that it is difficult to manage large and rapidly increasing aid inflows in ways which do not disadvantage producers of tradeable goods, and the private sector generally. This difficulty can be averted if conscious efforts are made to offset it and to stimulate positive responses from the supply side. Whether such responses prevail over the shorter-term management difficulties depends on the efficacy of state actions - and of aid - to bolster the supply side. The outcome is likely to be mixed, depending on country circumstances. Copyright 2007 Blackwell Publishing Ltd.

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  • Tony Killick & Mick Foster, 2007. "The Macroeconomics of Doubling Aid to Africa and the Centrality of the Supply Side," Development Policy Review, Overseas Development Institute, vol. 25(2), pages 167-192, March.
  • Handle: RePEc:bla:devpol:v:25:y:2007:i:2:p:167-192
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    References listed on IDEAS

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    7. Benjamin Davis & Sudhanshu Handa & Marta Ruiz-Arranz & Marco Stampini & Paul Winters, 2002. "Conditionality and the Impact of Programme Design on Household welfare: Comparing two diverse cash transfer programmes in rural Mexico," Working Papers 02-10, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
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    Cited by:

    1. Morrissey, Oliver, 2015. "Aid and Government Fiscal Behavior: Assessing Recent Evidence," World Development, Elsevier, vol. 69(C), pages 98-105.
    2. Henrik Hansen & Derek Headey, 2010. "The Short-Run Macroeconomic Impact of Foreign Aid to Small States: An Agnostic Time Series Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 46(5), pages 877-896.
    3. Feeny, Simon & de Silva, Ashton, 2012. "Measuring absorptive capacity constraints to foreign aid," Economic Modelling, Elsevier, vol. 29(3), pages 725-733.
    4. Wako, Hassen, 2016. "Aid, institutions and economic growth: Heterogeneous parameters and heterogeneous donors," MERIT Working Papers 009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. George Mavrotas, 2011. "Security and Development: Delving Deeper into the Nexus," Chapters,in: Security and Development, chapter 1 Edward Elgar Publishing.
    6. Selaya, Pablo & Thiele, Rainer, 2008. "Aid and sectoral labour productivity," Kiel Working Papers 1468, Kiel Institute for the World Economy (IfW).
    7. Wako, Hassen, 2011. "Effectiveness of foreign aid in sub-Saharan Africa: Does disaggregating aid into bilateral and multilateral components make a difference?," MPRA Paper 72617, University Library of Munich, Germany.

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