Aid, Taxation and Development in Sub-Saharan Africa

Christopher Adam () and S. A. O'Connell

Economics and Politics, 1999, vol. 11, issue 3, pages 225-253

Abstract: External aid donors have gradually shifted from a benign view of the African state to one that presumes a conflict of interest between the state and its own private sector. What are the implications of this diagnosis for the design of aid programs? We develop a model that locates slow growth in the overly narrow interests of a political elite. We study the impact of aid on policy choice and private investment and the role of conditionality in securing the gains from aid. The results capture key features of the current diagnosis while underscoring the need for more sophisticated treatments of domestic political institutions, institutional change, and donor motivations. Copyright 1999 Blackwell Publishers Ltd..

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