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Aid Not Linked To Economic Prosperity

Well, duh. 

“We find little evidence of a robust positive correlation between aid and growth,” wrote Raghuram Rajan, who stepped down as IMF chief economist at the end of 2006, and Arvind Subramanian, who left the IMF this year, said.

“We find little evidence that aid works better in better policy or institutional environments, or that certain kinds of aid work better than others,” they added.

Rajan is now teaching at the University of Chicago, while Subramanian joined the Washington-based Peterson Institute for International Economics.

“Our findings suggest that for aid to be effective in the future, the aid apparatus will have to be rethought.”

The formula for prosperity has been the same for ages. 

Liberty, rule of law, and free markets.  It’s really not that hard.  Throwing money at a problem never solves the problem (unless the problem is that you need money).  For example, poor irresponsible alcoholics who win the lottery still have the same problems.  They just drink better liquor.

Posted by Owen at 2224 hrs
Culture + Foreign Affairs

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