Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the quot;curse of natural resourcesquot; literature. In this paper we discuss this effect and document its magnitude. Using data for 108 recipient countries in...

Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the "curse of natural resources" literature. In this paper, we discuss this effect and document its magnitude. Using panel data for 108 recipient countries in the...

Recently, Sachs et al. (2004) have argued in favor of a massive increase in foreign aid to Africa in order to escape from a poverty trap. They propose to increase the capital stock in one step, through a large, well-targeted infusion of foreign assistance. In this article we show that foreign...