Thursday, December 10, 2009

A Stimulus tool for foreign aid

New work reported by VOX on limitation of internal transportation in Africa. Krugman reported similar results when working with trade patterns. I find it important and it leads to a Stimulus. Why not simply subsidize the shipment of goods to an African villager? Pay any shipper of goods 20% subsidy for shipping costs when the good arrives at an African village.

The subsidy in shipping will, over time, ease the leading constraint on African development. The cost is slightly higher taxes for OEDC citizens.

Forget African exports here, the idea is to get them great stuff sooner and allowing natural development of transportation.

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