I discuss how aid can support growth in small, isolated economies. Small markets frustrate scale economies and competition. Combined with high transport costs, essential inputs become prohibitively expensive. Breaking the coordination problem requires pioneering investment. Since this generates...

To my knowledge this study undertakes the first comprehensive and systematic empirical test of the hypothesis that while returns to invested capital in Sub-Saharan Africa are high compared to select Asian and South American markets, investment rates are low.  I investigate three sources:...