Why foreign aid cannot be regressive?


shutterstock_234904789-750x500

Now, when the European Union seems to be considering a significant increase in aid for Africa—led this time not by humanitarian concerns but by the well understood self-interest as reduction of migration is hard to imagine without a substantial convergence in incomes between Africa and Europe—it is worth pointing out that one argument against aid cannot hold. This is the argument made sometime in popular press (and at times, in academe too), that aid to the poor countries is just a transfer of resources from the poor people in rich countries to the rich people in poor countries. This is what is in economics called a “regressive transfer”. (“Progressive” transfer is what we desire to achieve: tax a richer person and transfer the money to a poorer.)

The complete article

Branko Milanovic — globalinequality

Image source

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s