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July 17, 2005
Milton Friedman welcomes the Globalisation Institute
"I am pleased to learn that you are organizing a Globalisation Institute. Adam Smith's case for worldwide free trade is every bit as valid today as it was in 1776 when The Wealth of Nations was published. Moreover, with today's technology, ease of transportation and of communication, the potential benefits from worldwide free trade have never been greater. More power to you in spreading the good word."
Milton Friedman, winner of the Nobel Prize in Economics
Posted on 11:03 PM | TrackBack
July 03, 2005
More Aid, Less Growth
On the eve of the G8 summit, a report published by the Globalisation Institute shows that that for every 1% increase in development aid received by a developing country, there is a 3.65% drop in real GDP growth per capita. Contrary to the conventional wisdom of the World Bank and others in the development community, the study finds that even where recipients have good governance, the effect is also negative.
The report - More Aid, Less Growth - is written by Dr Tomi Ovaska, Assistant Professor in Economics at the University of Regina in Canada. He uses data from 1975 to 1998 and a sample of 86 developing countries.
Dr Ovaska says that instead of top-down approaches to aid, "helping and encouraging developing countries to create business environments that are compatible with free markets is a promising and a potentially cost-effective way to unleash the individual effort and creativity in those countries."
The report follows work published last week by the International Monetary Fund that cast doubt on the idea that aid leads to higher growth.