Capital flight is a major problem in Sub-Saharan Africa as it impacts negatively on capital scarce economies. Trillions of dollars have flown out of Africa over the last four decades. Capital flight has accelerated since 2000, a period that coincides with the commodity-driven growth resurgence in Africa.
Evidence suggests that capital flight has significantly undermined Africa’s growth and development – through the siphoning of potential investment capital out of the continent. Capital flight is a global problem requiring a global solution. However, Africa, as a major source of capital flight, needs to speak with a unified voice on this issue, and to spearhead the fight against capital flight, including the tracing and recovery of these ‘stolen’ assets. This requires that African policy makers and the broader populace fully appreciate the magnitude of the capital flight problem and its various manifestations, as well as its impacts on Africa’s development.Read more: Capital Flight and Tax Havens
Macroeconomic Effects of Foreign Aid fits very well under the broad topic “Sources and spread of growth opportunities and distribution of benefits” in the AERC 2010-2015 strategic plan. This is a joint activity of UNU-WIDER and AERC which focuses on the macro-economic management of aid. On the basis of this research, the project will contribute to a better understanding of the macro-economic management of aid among national policy-makers and development agencies.
The project is coordinated by Professors Finn Tarp and Tonny Addison from the World Institute for Development Economics Research of the United Nations University (UNU-WIDER).
A call for expression of interest posted on the AERC website yielded 86 proposals abstracts of which 32 were selected for the preparation of full proposals that were presented at the AERC/UNU-WIDER conference, 2-3 December 2011. Following the conference, a smaller number of papers have been selected and have been commissioned for further work following the workshop.