@techreport{Auty2007rent,
abstract = {This paper conceptualises foreign aid as a geopolitical form of rent in order to help  distinguish the conditions under which aid is detrimental to sustained economic  recovery from those where it is beneficial. Foreign aid shares with natural resource rent  and contrived (i.e., government monopoly) rent the property of being a large revenue  stream that is detached from the economic activity that generates it, and elicits political  contests for its capture. Rent-driven models suggest such contests have two adverse  effects: (i) they deflect government incentives into rent-channelling at the expense of  promoting wealth creation; and (ii) the resulting political allocation of the rent distorts  the economy and precipitates a growth collapse, which is protracted. In this context, the  three principal causes of aid failure identified in the literature (corruption, a poor policy  environment and Dutch disease effects) are all symptoms of the destabilizing impact of  rent streams on immature political economies. Consequently, the deployment of foreign  aid to revive collapsed economies runs the risk of perpetuating rent-seeking and thereby  postponing essential economic restructuring. This paper compares the varied impacts of  aid on the development trajectories of Mauritania, Kenya and Mozambique. It argues that successful aid deployment requires: recognition that aid modalities differentiate  aid's effectiveness; stronger public accountability; and the construction of a cohesive  pro-reform political constituency. The paper proposes a dual track strategy as a  politically practical means of deploying geopolitical rent to restructure distorted  economies. \textendash{} Africa ; aid ; rent ; resource curse ; economic development},
address = {Helsinki},
author = {Richard M. Auty},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
isbn = {9291909785=978-92-9190-978-0},
keywords = {H53; O19; O55; 330; Entwicklungshilfe; Rententheorie; Wirtschaftswachstum; Mauretanien; Kenia; Mosambik},
language = {eng},
number = {2007/35},
publisher = {UNU-WIDER},
title = {Aid and rent-driven growth: Mauritania, Kenya and Mozambique compared},
type = {Research Paper, UNU-WIDER, United Nations University (UNU)},
url = {http://hdl.handle.net/10419/63391},
year = {2007}
}
