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Why Is ‘The Dutch Disease’ Always a Disease?* The Macroeconomic Consequences of Scaling Up ODA

In: Economic Alternatives for Growth, Employment and Poverty Reduction

Author

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  • Terry McKinley

Abstract

Why do many economists believe that in developing countries a large surge of capital inflows, such as Official Development Assistance (ODA), will lead to a ‘Dutch Disease’, and not development? What, exactly, is a ‘Dutch Disease’ and why is it considered to be invariably detrimental to development?1 This brief paper attempts to address these issues.

Suggested Citation

  • Terry McKinley, 2009. "Why Is ‘The Dutch Disease’ Always a Disease?* The Macroeconomic Consequences of Scaling Up ODA," Palgrave Macmillan Books, in: Terry McKinley (ed.), Economic Alternatives for Growth, Employment and Poverty Reduction, chapter 5, pages 85-99, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-25063-5_6
    DOI: 10.1057/9780230250635_6
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    Cited by:

    1. Hamzeh Arabzadeh, 2016. "Foreign Aid, Public Investment and Capital Market Liberalization," LIDAM Discussion Papers IRES 2016018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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