Tim Worstall writes at TechCentralStation (also see a counterargument from Owen Barder):
[African capital] isn't being invested to create further wealth at home because, well, because of a lack of human, social and institutional capital. Those things we take for granted, the rule of law, sanctity of contract, safety of private property and the like. We should, therefore... aid development by concentrating on the supply side, sorting out the infrastructure of the economy, rather than simply pumping money in.
True enough. But I take issue with Tim W.'s suggestion that no aid agency (other than the MCC) has ever worked out the importance of property rights or infrastructure - the business environment in general.
I looked at the World Bank's recently approved projects; the most recent three are water and sanitation in Mexico, electricity distribution in Vietnam, and electricity generation in Ethiopia. Recent Bank Group research looks at efficient taxation, trade liberalisation, and business-government dialogues on improving the investment climate. And, of course, if the World Bank has never heard of property rights or infrastructure, ceci n'est pas un PSD Blog.
Join the Conversation