DOES FOREIGN AID PROMOTE DEMOCRACY?

Much of the literature has focused on the impact of aid on growth. There has not been as much evidence, however, on the role of aid in institutional development. Kangoye (this volume) explores this issue by analysing the impact of external aid on the quality of institutions, which are crucial for sustaining growth.

Kangoye uncovers that aid flows can improve democratization by dampening the potential adverse effects of external shocks. This finding has significant implications for African countries, which often experience terms of trade (TOT) shocks. The negative TOT shocks have, furthermore, been found to contribute substantially to economic growth collapses (Arbache and Page 2007), which could derail the process of democratization. Thus, by smoothing out such shocks, external aid can virtuously enhance the success of the democratic dispensation recently embarked on in many African countries.

WHO IS THE ALIEN? XENOPHOBIA AND POST-APARTHEID SOUTH AFRICA

‘Most international migration from SSA nations is destined for other SSA countries (intra-SSA migration)’ (Naude 2010: 334), with migrants in search of political and/or economic betterment. Developing appropriate institutions to cope with migration would, therefore, constitute a worthwhile undertaking. South Africa presents an interesting case study of the potential conflict that may occur and the need to develop institutions to obviate the risk of such occurrence.

Recently the country has become a theatre of conflict between the locals and ‘outsiders’ (foreigners), in the form of widespread violence against the latter group. As pan-African integration proceeds, it is important to explore this conflict phenomenon, by identifying the characteristics of the victims and factors behind the violence. Duponchel (this volume) does just that, based on 2009 household data from the Johannesburg inner city and from the township of Alexandria.

The study finds that foreigners indeed face a higher likelihood of being victimized on the basis of xenophobia. It finds further that those foreigners living in the relatively poor and high unemployment areas face a higher likelihood of attack. These findings cannot be unique to South Africa, though, as migratory conflicts abound across the continent (Naude 2010). They suggest, therefore, the need to develop immigration institutions that take into account the realities of the labour market in the receiving country.