Returns on investment from public development aid

The German development aid minister (Dirk Niebel) has recently argued that every Euro of bilateral development aid creates a return of 1.80 Euros for the German export industry. (Neue Zürcher Zeitung, 17 Januar 2011 (p.17) If development aid indeed creates an 80% return on public investment for the German export industry I really wonder why Germany does not invest much more of its taxpayers’ money into development aid. Could it be that the ROE estimate is, self-servingly, inflated…

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