Customer Reviews

The Market for Aid

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Any serious reader would be curious about the definition of "market for aid" before reading this little book. I began with doubt on the concept and ended with disappointment and even frustration. Yes, there are demand and supply for aid. However, many sources of aid come without a price. The authors do not start by making a careful distinction between grants and concessional loans that bear interest rates lower than market rates. They simply say "If there is a market for aid, it is a strange one" and then move on. Worse yet, their analyses often mix up aid with private loans and foreign direct investment, without making an important distinction between the social objective of aid and the commercial objective of private finance. It is laughable to read the heading "Can aid agencies be smarter than the invisible hand?" The authors appear to forget that aid agencies are in development business, not business. To be fair to the authors, the book presents a large amount of useful information and data, touches upon many serious quesions, and provides some useful ideas and policy recommendations. But the book suffers badly from a poor conceptual framework that gives reader an impression that the authors attempt to fit the rich stories of development business into a simple "Economics 101" framework. It would have been a success if the authors just focus on the political economy of grants and concessional loans. In comparison, William Easterly's "Elusive Quest for Growth" is 10 times more worthwhile to read.