A small macroeconomic model is used as the basis for estimating the determinants of investment in South Africa within a simultaneous equations framework. Investment is highly sensitive to interest rates, relative prices, and political instability. The policy implications of such sensitivity are...

type="main" xml:id="obes12033-abs-0001" <title type="main">Abstract</title> <p>Humanitarian aid can be seen as a political investment motivated by altruism or by economic benefits for the donor. Uncertainty in the returns to this investment may generate hysteresis effects and inertia in aid allocations. I model the...</p>