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Abstract

This paper uses a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth per capita GDP. We find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies. Good policies are ones that are themselves important for growth. The quality of policy has only a small impact on the allocation of aid. Our results suggest that aid would be more effective if it were more systematically conditioned on good policy.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.90.4.847
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 90 (2000)
Issue (Month): 4 (September)
Pages: 847-868

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Handle: RePEc:aea:aecrev:v:90:y:2000:i:4:p:847-868

Note: DOI: 10.1257/aer.90.4.847
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Find related papers by JEL classification:

• O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
• F35 - International Economics - - International Finance - - - Foreign Aid
• O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

References

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1. Undergraduate Economics Journal Club
   by Liam Delaney in Geary Behaviour Centre on 2010-09-10 14:31:00

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