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Aid dependence reconsidered (English)

When foreign aid undermines institutional development aid recipients can exhibit the symptoms of aid "dependence" - benefiting from aid in the short term but damaged by it in the long term. The authors find that one equilibrium outcome can be high aid and weak institutions, even when donors and recipients fully anticipate aid's effects on institutional development, but don't take the drastic steps needed to put the country on the path to independence...
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Citation

Azam, Jean-Paul; Devarajan, Shantayanan; O'Connell.

Aid dependence reconsidered (English). Policy, Research working paper|no. WPS 2144 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/847671468183266997

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