Sunday, April 27, 2008

Word of the Day: donor state

donor state (n.) – A donor state is one in which development aid plays such an important role in the national economy and state budget, that donors wield significant influence in the nations politics and economy. Symptoms of a donor state include large proportions of foreigners working in and for government ministries, a tendency to promote government programmes over private sector development, a high production of “sector studies”, high inflation and/or high interest rates, an impotent banking sector and a weak private sector. Countries that could currently be described as donor states include Rwanda, Afghanistan, (South) Sudan, Chad and many others. The long-term success of these countries' economies depends on their developing into independant economies and institutions before their dependence becomes institutionalised and permanent. Such quasi-permanent donor states are particularly prevalent in sub-Saharan Africa.

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