Click here for quick links to Annual Reviews content online, including: • Other articles in this volume • Top cited articles • Top downloaded articles • Our comprehensive search Further ANNUAL REVIEWS Political Effects of International Migration Devesh Kapur p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p 479 Indexes Cumulative Index of Contributing Authors, Volumes 13-17 p p p p p p p p p p p p p p p p p p p p p p p p p p p 503 Cumulative Index of Article Titles, Volumes 13-17 p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p p 505
This article challenges a long-held development-policy assumption that aid and foreign-direct investment~FDI! serve as substitutes or complements in accelerating the development of the world's poorer countries+ We show both theoretically and empirically that aid and FDI affect development differently+ Aid contributes powerfully to both economic growth and human development, and the higher the level of human capital in a country, the more aid contributes+ By contrast, FDI, at best, has no effect on economic growth and actually slows the rate of human development in less-developed countries+ We find no evidence that the degree of democratic responsiveness in government conditions the effectiveness of either aid or FDI, although we do find that democracy independently increases human development in all but the most developed countries+ Our results demonstrate that FDI and aid are not, and cannot be, substitutes in the development of the world's poorer countries+ Nor even can they be thought of as complements-certainly not at mid to low levels of devel-opment+ In the end, poor countries need democracy and aid, not FDI+ But as important as official assistance is to improving people's lives, the reality is that it is trade and private capital flows that will make the real difference that are more, more, much more significant+
U+S+ Secretary of State Colin Powell 1In the dialogue on sustainable development, it is widely accepted that even the most promising less-developed country often lacks the resources to fund its own development and must look to foreign capital to augment domestic sources+ These foreign capital inflows come most commonly in two forms: foreign aid, and
Education is widely perceived to be a tonic for the rising inequality that often accompanies development. But most developing-country governments tilt their education spending toward higher education, which disproportionately benefits elites. We find that in countries with high "tertiary tilts," rising primary enrollment is associated a decade later with far higher inequality-not the lower Gini coefficients many would expect. Since most developing countries tilt their spending toward higher education, our analysis suggests that efforts that concentrate only on expanding mass education, such as the UN's Millennium Campaign, could end up raising inequality in much of the developing world.We are grateful to
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