El uso del silencio del acusado con el propósito de impugnar de su credibilidad

The basic theoretical framework for most of the empirical studies on aid and

growth has been the Harrod-Domar growth model in its simplest form (see Lewis,

1955; Rostow, 1960; Rosenstein-Rodan, 1961) or in its developments, known as ‘two-

gap’ models (Chenery and Bruno, 1962; Chenery and Strout, 1966, a commonly used

version). A bottleneck approach characterises the whole class of the models mentioned.

In particular, in the Harrod-Domar formulation capital shortage is the only constraint on

growth, while the simplest version of the two-gap model identifies foreign exchange

shortage as a further constraint on growth in addition to capital shortage.

The Harrod-Domar9 condition for equilibrium growth is derived by the

Keynesian savings-investment equilibrium condition when put in a dynamic context.

Savings are assumed to be a constant proportion s of real income Y, so that S = s * Y.

The investment function is derived by assuming a constant desired capital/output ratio

k. Entrepreneurs will increase investment to meet anticipated increases in demand if

they expect output to grow, that is / = k * AY . Equilibrium in the goods market

requires that desired savings equal desired investments at each moment in time and that

capital is fully utilised. The equilibrium condition is thus obtained by imposing I = S

and in its simplest form is given by:

A Y /Y = s /k ,

9 It is common practice to refer to the Harrod-Domar model, even though, as it is fairly well understood, the model proposed by Harrod is slightly different from the one suggested by Domar. Both yield the same equilibrium growth condition, although they differ in the interpretation of the dynamics between the variables involved.

where AY/Y is the rate of growth of national income, k is the incremental capital output

ratio (ICOR) and s is the saving ratio. An important implication is that capital shortage

is the main constraint on growth: growth can be raised if the saving rate - and thus the

investment rate - is increased, or, in other words, if the capital constraint is eased.

Two-gap models include an additional constraint on growth, which stems from

the foreign exchange equilibrium condition. Accordingly, two constraints on growth are

identified:

1) the saving gap (S-I), where S is the domestic savings and I the domestic investment;

2) the foreign exchange gap (X-M), where X is the export earnings and M the import

requirements.

Various combinations of the gaps and of their relative size may arise.

According to whether the growth constraint is caused by a limited absorptive capacity

or by a prescribed growth target, the requirement of foreign capital to fill the gaps and

ease the bottlenecks will be determined by whichever of the two gaps is dominant.

Foreign borrowing is thus not only intended to ease the savings-investment gap, that is

to provide additional capital where it is scarce in order to promote growth, but also

serves to ease foreign exchange constraint. This arises when earning from exports are

not sufficient to finance imports from abroad and may constitute an obstacle to faster

growth if no substitution between domestic and foreign resources exists.

A further development of the two-gap models has been recently proposed by

L.Taylor (1990) and Bacha (1990). Here, an additional constraint on growth is

identified in the government finance gap, namely (T-G), where T is total government

revenues and G total government expenditure, hence the denomination ‘three-gap’

model. These models strictly relate to the structuralist tradition, which is particularly

concerned with the institutional structure of developing countries economies.

The class of Harrod-Domar growth models offers in essence a Keynesian

explanation of the growth mechanism. It has been extensively used as a basis for the

empirical research on the impact of aid on growth. Given the condition for equilibrium

growth - which is explicit in the Harrod-Domar model and is implicit in the two- and

three-gaps models - the role of aid is that of an exogenous impulse to capital

accumulation leading to higher and self-sustained growth. Its impact is therefore

interpreted and measured in terms of its multiplier effect and in relationship with either

the ICOR or the saving rate.

Serious limitations, however, undermine the appealing characteristics of clarity

and structural simplicity of these models. They are simplistic: the underlying

assumptions of a fixed coefficient production function (i.e. no substitution in

production) and of a fixed saving rate are too rigid, hence highly unrealistic. Moreover,

the lack of generality of this class of models becomes apparent when considering that

they are basically one-sector growth models. No account is taken of the labour force or

of relative price dynamics, to mention just two of the factors that affect growth besides

capital accumulation. As a result, the growth mechanism is not really explained10 and

the ways in which aid may interact with savings, investment and growth not clearly

identified.