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Ultimate Software

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Mariele Villar

on 26 May 2014

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Transcript of Ultimate Software

Three Prevailing Views on Aid
What are your views on the relationship between aid and growth?
China’s Aid to Africa
Overview of China's Aid to Africa
Early Impact Aid Boosts Growth
Going Forward

Presented By:

Xin He
Mariele Del Villar
Llanissa Lee
Luxuan Xie

The Type of Aid Matters
Aid has No Effect on Growth, and May Actually Undermine Growth.

Aid has a Positive Relationship with Growth on Average(Although not in Every Country), but with Diminishing Returns.

Aid has a Conditional Relationship with Growth, Helping to Accelerate Growth Only Under Certain Circumstances.
Help Africa achieve better development

Create access to Africa’s :
natural resources
local markets
business opportunities

1. Aid for disasters, emergencies, and humanitarian efforts and/or food aid.

2. Aid that might affect growth, but indirectly and over a long period of time.

3. Aid aimed more directly to support growth relatively quickly.
Estimate the model over a four year period.
Factors included growth, possible endogeneity & lags

Positive impact on growth
Does not work everywhere
Large amounts diminish returns

Mean = 2.7% of GDP

1% increase in impact aid produces an additional 0.31 percent annual growth

Effects of Early Impact Aid
Countries with Good Policies
Corruption, rule of law, risk of expropriation or repudiation of contracts & bureaucratic quality.

Relationship between early impact aid and growth is strong.

Countries with higher life expectancy
Aid does not only work in these countries.

Limits to Early Impact Aid
Some counties can absorb more, others less

Aid capacity depends on institution and general health

Strong institutions and higher life expectancy can absorb more

Aid can either undermine or boost growth

Impact of aid is the strongest at early stage

However, early impact aid is limited to institution and life expectancy

Overall, average aid has boosted growth

Not Only in Good Institutions
But in Other Situations

Strong institutions(Max)
eg: South Korea

Less strong institutions(Still work)
eg: Mozambique &Uganda,

eg: Smallpox, River blindness, Polio, ect…

Tanzania's First Lady Salma Kikwete, Chinese President Xi Jinping, Tanzanian President Jakaya Kikwete and the First Lady of China Peng Liyuan pose at State House in Dar Es Salaam, Tanzania on March 24, 2013.
45.7% of the RMB: 256.29 billion.

Raised questions, its composition,
its goal and nature.

China’s selfish quest

Damage Africa’s efforts

Contribute to a foundation for long-term economic development


Some analysts appears have intense pessimism on aid:
Poor governance

Thank You Very Much!
Any Question?

Efforts to strengthen institutions.

Build human capital.

How to made more effective in supporting growth and development.
Sun, Y.(2014, February).
China’s Aid to Africa: Monster or Messiah?
Retrieved from: http://www.brookings.edu/research/opinions/2014/02/07-china-aid-to-africa-sun
Benign But Not Altruistic

Constraints Are Real,
Not Barrier to Growth
Food Aid

Humanitarian Relief Aid
A U.S. Navy doctor treats patients from tsunami-devastated villages
Environmental Conservation Aid
Educational Aid

The Organization for Economic Co-operation and Development is an international economic organization of 34 countries founded in 1961 to stimulate economic progress and world trade.
Organization for Economic Co-operation and Development
Membership organization OECD
Term coined by the Development Assistance Committee (DAC) of the (OECD) to measure aid. It is widely used as an indicator of international aid flow including loans.
Official development assistance (ODA)
Infrastructure Aid
Full transcript