Does aid (I mean physical infrastructures and others ) promote country development ?
i wanna know both the positive and negative effect
Check out the literature on Asia and the Developmental State.
http://www.tandfonline.com/doi/abs/10.1080/09512740802650971
http://www.cornellpress.cornell.edu/book/?GCOI=80140100741250
Maybe we shouldn't be aiming for competitiveness. I am certain that co-operation is the key to the future.
Read Why Africa Fails ( 2012), and Dead Aid.
Too much aid creates 'beggar mentality'.
All information on what is happening with aid is useful, but it is also important to know how economy develops and how aid can (or cannot) help this development.
According to the new theory of international trade (for to start, please see the paper below), the real wage level of a country depends on the set of production techniques that the nation can afford. If this is true (I believe it is), we should know how aid helps to change the set of technique.
The term set of production techniques has a well defined definition. A production technique is not a state of knowledge but a set of input coefficients (amounts of inputs for to produce a unit of product or service). Whole set of production techniques is a matrix and we denote it by A.
If the labor productivity in the production of a product improves, the labor input coefficient of the product decreases and A improves accordingly.
Now the set of production techniques A depends on various factors. Infrastructure of a nation such as roads, ports, railways, and others improves the transport part of the set of production techniques. If we omit discussion on corruption and others, aid spent on infrastructure helps to improve A.
However, if there is no improvement of other part of A, effect becomes saturated easily and further investment has no effect. Then, how can we improve the set of production technique A? It requires a bit of contrivance, improvement of the production process, better team work, more rational layout of machines, introduction of new tools and machines, and so on. Neoclassical economists often emphasize the importance of capital investment, but there are also many things to do along side with capital investment (for example, new machines). All these things depend on the workers, engineers and managers. If you do not have good work force, it is impossible to improve your set of production techniques A continuously and without limit.
To get a good work force requires (1) a good education and (2) good experience on the spot (I mean production spot). Learning opportunity is very important. Japan, Taiwan, Korea and now China developed and are developing by learning by doing. Then, the role of entrepreneurs is crucial, because they provide the opportunity for the people to learn how to work and produce. Financial system may help entrepreneurs to get their initial capital but financial institution matters at the last stage.
There are many good positive studies on aid and development but I am afraid that few in-depth studies appear. One of the reasons of this state may come by the relative neglect of theoretical studies.
Conference Paper The New Interpretation of Ricardo's Four Magic Numbers and t...
I have read Danbisa Moyo's Dead Aid (2009), which Elly Twineyo Kamugisha recommended in the above post (post number 5). The subtitle is
- Why aid is not working and how there is another way for Africa.
It was translated into Japanese. I think it is really a good book. It may be translated into Chinese. She talks much about Chinese aid and trade in a positive way.
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