Aid as a Flight Forward

Abstract

This article is in two parts. The first part reviews the evolving development theory of the last sixty years and deduces its implications for development aid. The observed changes in development thinking explain in no small measure the amazing shifts in, and accumulations of, aid priorities. The second part moves from theory to practice by looking into the lessons that can be learned from a concrete development success story and reviewing the present situation of development aid, touching on several points made in Jan Pronk's article published in this journal recently (Pronk, 2001). DEVELOPMENT THEORY AND DEVELOPMENT AID CONSEQUENCESWhen development aid started some fifty years ago, the early writers on the subject of development tried to clarify the delicate balance between income, savings, investment and output required to maintain stable growth and full employment. W. Arthur Lewis stressed in his Theory of Economic Growth (Lewis, 1955) that the decisive step in the development process is a 'rise in the rate of productive investment from, say, 5 per cent or less to over 10 per cent of national income'.A number of theorists focused on the difficult questions of how to start economic growth in backward areas, and how -once started-to nurture it. Igniting a process of industrialization became a central concern to these authors whose work has been labelled by catchphrases: 'big push' for Rosenstein-Rodan, 'balanced growth' for Nurkse, 'unbalanced growth' for Hirschman, 'growth poles' for Perroux, 'take off' for Rostow and 'great spurt' for Gerschenkron.Rosenstein-Rodan was probably the first 'modern' development economist. As early as 1943 he argued that investment decisions are interdependent and that -at early stages of development -investment projects are often too risky for individual investors. He came out in favour of the 'big push' development strategy, involving government planning to co-ordinate and provide incentives for simultaneous investment in several complementary industries that would increase both production and the size of the Development and Change 33(2): 247-260 (

Economic Globalization and Institutions of Global Governance: Comments and Debate (I)

“…Griffin submits that 'old-style foreign aid is nearly obsolete' and should be replaced by a tax and transfer mechanism, a progressive tax on GNP, thereby globalizing the welfare state (Griffin, 2003: 804). I concur that after more than fifty years, development aid needs a close look and certainly an important overhaul (see Emmerij, 2002). But to say in less than ninety words that it must be replaced by a global tax structure is pie in the sky.…”

Composition de l'APD bilatérale, 2015, versements bruts, Nouvelle-Zélande

“…Il a en outre été reconnu, dès le début des années 60, que les taux élevés de croissance du produit intérieur brut (PIB) n'avaient pas véritablement modifié les situations sociales (Emmerij, 2002…”

W. Arthur Lewis in Retrospect

“…Nonetheless, with the advantage of a half-century of hindsight, it is evident that Lewis and virtually all others who explored determinants of economic growth in the 1950s overemphasized the role of physical capital accumulation, as modern growth texts (e.g., Barro and Sala-i-Martin 2004) offer far more sophisticated interpretations. Lewis also appeared to accept the "big push" or "take-off" models of growth stemming from Nelson (1956) and other s such as Rosenstein-Rodin, Gerschenkron, and Rostow (Emmerij 2002), but which have little adherence today.…”