Economists: Economic aid to poor nations as ineffective

Economists: Economic aid to poor nations as ineffective

news.yahoo.com

WASHINGTON (Reuters) - Aid to poor countries has little effect on economic growth, and policies that rely on such claims should be reexamined, two former International Monetary Fund economists wrote in a paper released this month.

We find little evidence of a robust positive correlation between aid and growth," wrote Raghuram Rajan, who stepped down as IMF chief economist at the end of 2006, and Arvind Subramanian, who left the IMF this year, said.

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Is anybody surprised here? I mean look at all the aid spent and sent to Africa or any other area adn the problems persist. You cannot simply throw money at the proble. Its at best a temporary bandaid. The key to helping these countries is to use the money to set up an infrastructure that allows them to grow and become independant.

news.yahoo.com
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I think that the problem is that the money and food supplies end up in the hands of certain groups and not in the hands of the people that need it.