Aid E¤ectiveness: The Role of the Local Elite
نویسندگان
چکیده
We study the importance of the local elite as a determinant of the e¤ectiveness of foreign aid in developing countries. An "extractive" elite will misuse aid ows, an issue that is probably as old as foreign aid itself. We proxy for the existence of an "extractive" elite by using an historically determined variable: the percentage of European settlers in colonial times. Our econometric results clearly show the importance of this factor and its robustness to a wide set of alternative aid-growth relationships advanced in the literature. Keywords: Foreign aid; Elite; Economic growth JEL Classi cation: C23; F35; F43; O11 Lecturer in Economics, University of Glasgow; Lecturer in Macroeconomics, University of Manchester, and Centre for Growth and Business Cycle Research.
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