Given its massive development deficits and the effects of the global economic crisis, many observers, included me, are calling for increased aid to Africa. Most of these appeals are based on Africa’s need for more resources. But there is a different argument.
Aid to Africa is today as productive as it has ever been.
Craig Burnside and David Dollar identified a group of policies (including fiscal stability and low trade barriers) that strengthened the link between foreign aid and per capita income growth. These are the very policies that African governments have been improving over the past decade.
Even after the onset of the global economic crisis, and despite the fears that these