… is from page 38 of William Easterly’s outstanding 2001 book, The Elusive Quest for Growth:
People respond to incentives. Think of the incentives facing the recipients of foreign aid. They invest in the future when they get a high return to their investments. They do not invest in the future when they do not get a high return to their investments. There is no reason to think that aid given just because the recipient is poor changes the incentives to invest in the future.