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Putting aid in its place: Insights from early structuralists on aid and balance of payments and lessons for contemporary aid debates

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  • Andrew M. Fischer

    (Institute of Social Studies, The Hague, The Netherlands)

Abstract

Recent debates on aid and development are waged on narrow terms in comparison to earlier debates in the 1950s and 1960s. The principal concern of the 'structuralist' pioneers of development economics, and the key absence in the current debates, was an understanding of the structural impediments faced by countries going through late industrialisation and rapid urban growth. These result in chronic trade deficits, shortages of foreign exchange and persistent balance of payments disequilibria. The positive potential of aid was understood to lie in its ability to mediate these imbalances in the context of national industrialisation strategies. By the same logic, this potential is lost if countries run trade surpluses. Current debates on aid mostly overlook this dual logic, despite the fact that both positive and negative experiences of post-war development largely vindicate these structuralist insights, particularly in light of current global financial imbalances. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Andrew M. Fischer, 2009. "Putting aid in its place: Insights from early structuralists on aid and balance of payments and lessons for contemporary aid debates," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(6), pages 856-867.
    • Handle: RePEc:wly:jintdv:v:21:y:2009:i:6:p:856-867
    DOI: 10.1002/jid.1623
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    References listed on IDEAS

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    Cited by:

    1. Fischer, A.M., 2010. "Is China turning Latin?," ISS Working Papers - General Series 19431, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Wim Naudé, 2011. "Foreign Aid for Innovation: The Missing Ingredient in Private Sector Development?," Working Papers 2011/35, Maastricht School of Management.
    3. Andrew Martin Fischer, 2014. "Redistribution as social justice for decarbonising the global economy," The Economic and Labour Relations Review, , vol. 25(4), pages 574-586, December.
    4. Gruber, Aaron, 2023. "Navigating a world of constraints: Developmentalism, industrial policy, and the limits to structural transformation in Ethiopia," ÖFSE-Forum, Austrian Foundation for Development Research (ÖFSE), volume 87, number 287748, Juni.
    5. Ingrid Harvold Kvangraven, 2021. "Beyond the Stereotype: Restating the Relevance of the Dependency Research Programme," Development and Change, International Institute of Social Studies, vol. 52(1), pages 76-112, January.
    6. Andy Sumner, 2010. "Global Poverty and the New Bottom Billion: What if Three-quarters of the World’s Poor Live in Middle-income Countries?," Working Papers 74, International Policy Centre for Inclusive Growth.
    7. Rekiso, Zinabu Samaro, 2020. "Trade deficits as development deficits: Case of Ethiopia," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 344-353.
    8. Murat Arsel & Andrew M. Fischer, 2015. "Forum 2015," Development and Change, International Institute of Social Studies, vol. 46(4), pages 700-732, July.
    9. Fischer, A.M., 2016. "Aid and the symbiosis of global redistribution and development: Comparative historical lessons from two icons of development studies," ISS Working Papers - General Series 618, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    10. de Haan, A., 2009. "Aid: the drama, the fiction, and does it work?," ISS Working Papers - General Series 18705, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    11. Andrew Martin Fischer, 2010. "Is China turning Latin? China's balancing act between power and dependence in the lead up to global crisis," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(6), pages 739-757.
    12. Lindsay Whitfield & Cornelia Staritz & Mike Morris, 2020. "Global Value Chains, Industrial Policy and Economic Upgrading in Ethiopia's Apparel Sector," Development and Change, International Institute of Social Studies, vol. 51(4), pages 1018-1043, July.

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