Published on Africa Can End Poverty

What kind of fiscal stimulus for Africa?

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I said earlier that more important than the level of additional aid is what governments do with their own and donors' resources. My colleague Jorge Arbache provides some answers. He observes that, even if the recession was caused by a commodity price decline, public spending should not necessarily be spent on the commodity exporting sector--unless it employs large numbers of people, as does the cotton sector in West Africa, for instance. He also advocates expenditures on infrastructure (maintenance and even new investment) because they create jobs in the short run, and leave the economy better placed to benefit from a turnaround in the global economy in the medium-run.


Shanta Devarajan

Teaching Professor of the Practice Chair, International Development Concentration, Georgetown University

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