Abstract
The previous three chapters have analyzed in detail the entire “ODA value chain” of aid provision, allocation and utilization. Without reviewing all the evidence and problems, it seems that donors’ attitude and motives towards giving aid is of particular importance. Even assuming that donors’ interest is solely led by the thought of reducing poverty worldwide, there are two sides confronting each other: The “optimists” and the “pessimists”, or as William Easterly points out in his book The White Man’s Burden, the “Planners” and the “Searchers”. The dissimilar viewpoints originate from a different understanding of whether and how aid works. Planners
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argue that foreign aid provides additional financing, technical assistance and policy advice to low-income countries, thereby fostering economic development,
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call for a substantial increase of ODA and favor a big plan in order to e-liminate poverty,
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mostly follow general, blue-print-like, top-down strategies suggested and imposed by foreign, outside agencies,
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set up global development objectives to be met within a predefined time frame,
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utilize aid to develop countries and to transform bad governments into good ones.
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References
Easterly (2006), p. 5.
Ibid., p. 6.
Cooksey provides an overview on studies assessing the role of private accounting companies who are large beneficiaries of ODA. Privatization mandates, financed out of British development aid, amount to 193 for PriceWaterhousehouseCoopers and 153 for KPMG alone. See Cooksey (2004), p. 9 and the literature cited there.
See Gallup et al. (1999), p. 53.
In outside sub-Saharan countries aid does promote growth despite of policies, whereas in sub-Saharan countries it does only when there are good policies in place. See Dayton-Johnson and Hoddinott (2003).
See Dagdeviren et al. (2004).
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This section draws on the findings of Jared Diamond (1997) and the writings cited therein. Another recent contribution with historical perspectives on the development of regional differences is Hibbs and Olsson (2003) with special reference to biogeography and geography shaping the prosperity of nations today.
The majority of research indicates that there are no differences in the intelligence or capabilities of some people over other. Instead, intellectual abilities are shaped by the social environment and learned knowledge. Diamond (1997) also proves that northern civilizations were not more innovative than other peoples.
Theories developed in other professions (geography, anthropology, sociology) often do not “match” modern economic modeling and “[t]he different social and human sciences [...] have sadly become increasingly separated through narrow specialization — and none more so than economics.” Lal (1998), p. x.
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See McNeill (1963) and Braudel (1972).
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See Redding and Venables (2003).
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Engerman and Sokoloff (2005), p. 3.
See Engerman and Sokoloff (1997, 2005).
See Thiesenhusen (1989).
See Easterly and Levine (2002).
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See Sachs (2003b), p. 9.
See Go (2002).
See Hofstede (2001), p. 9.
See ibid.
See Müller et al. (1999). See also Gupta et al. (2002) for methodologies and findings in cultural clustering.
This and the next section draw on Heiduk (2005), p. 97–100.
See Weber (1980, 1993).
Easterly and Levine (1995).
Linder and Bächtiger (2005) have explored the conditions for democratization in 62 African and Asian countries between 1965 and 1995. They find that democratization is strongly related to favorable political and cultural factors, while economic factors have only limited effects. The index of power sharing was one of the strongest predictors for democratization.
Gallup et al. (2003) define ethnolinguistic fragmentation as the probability that two persons taken at random speak different languages.
Easterly (2006), p. 83.
See Greif (1994).
The following explications stem from Leipold (2006).
See Altbach (1982).
Szirmai (2005), p. 238.
See Thiong’o (1981).
See Todaro and Smith (2006), p. 376.
See Smith (2006) ibid., p. 377.
Weber (1949), p. 80.
See Eucken (1950).
See Hayek (1980).
See Leipold (2006), p. 144.
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Blank (2003), p. 459.
Ellis and Freeman (2004), p. 23.
See Jalan and Ravallion (1998).
See Hulme (2003) on conceptualizing chronic poverty.
See Todaro and Smith (2006), p. 225–226. Rural poverty as a percentage of the total poor (averaged 1991 to 2000) makes up the largest part for countries in Africa (e.g., Burkina Faso: 96%, Ghana: 80%) and Asia (Bangladesh: 82%, Thailand: 82%) and, although to a lesser extent, in Latin America (Guatemala: 81%, Panama: 66%).
See Fulginiti et al. (2004).
See Thirtle et al. (2003).
See Datt and Ravallion (1996) for India and Warr (2001) for South East Asia. Timmer (1997) identifies a positive poverty reduction impact of growth in the manufacturing sector, but with increasing inequality, which is not the case for agricultural growth.
See Mellor (2001). Empirical support is given by Datt and Ravallion (1998) for India.
See Datt and Ravallion (1996).
See Gallup et al. (1997).
See Todaro and Smith (2006), p. 428ff.
Todaro and Smith (2006), p. 437.
Ibid., p. 438.
See Hanmer and Naschold (2001).
See Thirtle et al. (2003).
See Fulginiti et al. (2004).
See Wagner (2005).
Montgomery and Weiss (2005), p. 6.
See Hanlon (2004), pp. 182–185 for further details.
See Easterly (2006), p. 378f.
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(2007). The role of regional conditions for poverty reduction and ODA. In: The Value Chain of Foreign Aid. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-1932-8_5
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