Ostracised meinte am 1. Jul, 09:57:
Thanks for the link to the FT article, although I think you could have quoted other parts of the IMF statements in that article, for example these two paragraphs: “The bad news is that even if delivered with the best intentions and used carefully by recipient governments, there are side effects like adverse effects on competitiveness, which can offset aid’s beneficial effect on growth,” the fund said. “The good news is that by paying careful attention to macroeconomic management and issues like absorptive capacity, perhaps aid may have a better chance of success. “
The IMF makes a distinction between aid that is given to promote growth and humanitarian aid, for example, after natural disasters, saying that the two should not be confused. “Humanitarian aid to save lives is right regardless of the macro effects. But when the aid is focusing on growth, you need to take into account the macro effects,” Mr Rajan said.
HedgeFundGuy antwortete am 1. Jul, 15:05:
The focus on the "Dutch Disease"--the effect of aid on exchange rates and then exports--is I think second-order relative to the main incentive problems created by giving money to governments. A government flush with cash has no incentive to do the things that increase growth because these things create highly concentrated losers in the short run who complain--who needs that? I think the IMF is still trying to avoid seeming to blame the victim, by pointing to this crazy technical effect caused by aid, as opposed to the simpler story that aiding corrupt dictators provides them less incentive to change.
But I'm a great admirer of Ragu Rajan.
