This concluding chapter summarizes the book’s main arguments regarding developmental foreign aid in the pharmaceutical field and suggests that similar conclusions apply to other industrial sectors, as well as to other (nonindustrial) sectors of interest to foreign aid, including the provision of services and the distribution of essential commodities. It also identifies a number of contradictions and tensions inherent to developmental foreign aid, including in regard to its effects on the state. First, given that the cases examined in the book confirm the importance of state capacity for foreign aid effectiveness, the chapter takes on the highly contested question of whether foreign aid could contribute to state capacity-building. Second, given the difficulties in increasing state capacity, maybe aid programs could simply bypass the state? The chapter then explains why even developmental foreign aid should not—but also cannot—replace the state. The type of foreign aid that is likely to be effective is not parachuting aid that evades local institutions and actors but, rather, foreign aid that relies on the institutions and actors in place. Finally, the chapter considers the recent wave of foreign direct investment (FDI) in the pharmaceutical sector in East Africa.
Is Foreign Aid a Vanguard of Foreign Direct Investment? A Gravity-Equation Approach
