The search for the key: Aid, investment and policies in Africa

The traditional aid-to-investment-to growth linkages are Mot very robust, e specially for African economies. Aid does not necessarily finance investmen t and investment does not necessarily promote growth. Differences in econom ic policy, on the other hand, can explain much of the difference in growth performances. Furthermore, domestic politics rather than aid or conditional ity has been the main determinant of policy reform. Where societies and gov ernments have succeeded in putting growth-enhancing policies into place, ai d has provided useful support. The combination of good policies and aid has created a productive environment for private investment and growth.