This paper examines the effect of aid on domestic savings in Sub-Saharan Africa. It departs from the previous literature on aid and savings in developing countries by abandoning the pervasive, but untenable, assumption that all aid is used to expand the trade deficit and thus applied wholly to...

Since the mid-1980s, sub-Saharan Africa has had the lowest savings and investment rates of any region in the world. It has also been the recipient of the highest levels of Official Development Assistance relative to output. Hence, many analysts have been concerned that ODA might be having a...