2. The Theory of Economic Development

Are developing countries, and particularly African countries, really gaining from their linkages—including Official Development Assistance (ODA)—to developed countries? Answers provided by different academic theories to this straightforward question reach radically different perspectives. Results from quantitative studies correlating ODA levels to GDP growth are surprisingly inconsistent—so much so that they point to completely opposite results. Raudino argues that this is not surprising, considering that ODA accounts for less than 5 % of Balance of Payment relations between developing and developed countries and that these studies focus on specific periods, regions or sectors, while ignoring way more powerful macro-dynamics between these two groups of countries. More generally, looking at academic theories in economics, political science and international relations, Raudino shows how they fail to establish a minimum common ground on matters directly relating to the question on the nature of their relation, if not on the much broader—and in principle easier—question of what kind of public policies developing countries need to adopt in order to expand their economies and create wealth.