Rethinking Aid
نویسنده
چکیده
This paper reviews the recent debate on the role of aid in providing finance, in changing policies in recipient countries, and in transmitting knowledge. It argues that where economic reforms are recent, as in much of Africa, donors can play an important signalling role. This potential remains untapped because aid allocations have been largely based on political considerations. Donors fear " aid dependency " and have therefore pushed for the substitution of domestic taxation for aid. The cost of taxation may instead justify the use of aid for tax relief, particularly where the cost of taxation is likely to decline with development.
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