Abstract

The Sahel is a border region between desert and fertile land. Because of the low density of resources, property rights cannot be established and because of the missing property rights there is overcrowding; population is high relative to the resource base. The crowding externalities involve welfare losses that, with free migration, will be exacerbated by direct aid. Replacing direct aid with indirect aid given to the neighboring fertile regions will not only reduce the welfare losses; under mild technological conditions this measure will, in the long run, increase the aggregate production volume of all regions by more than the amount of the aid and will even improve the standard of living in the Sahel.