The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 7

The text offers two reasons why private investment might be better for poor countries than assistance tendered by foreign governments or international agencies. One is that technical assistance often comes along with private investment as part of the package. The other is that private investors may be more determined to see their funds invested profitably, and therefore less likely to subsidize projects that do not promote economic growth. Can you think of any reasons for the opposite view: Why government assistance or assistance by international agencies would be better for poor countries than private investment?