The Aid Effectiveness Literature: The Sad Results Of 40 Years Of Research

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The Aid Effectiveness Literature: The Sad Results Of 40 Years Of Research

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Hristos Doucouliagos
Martin Paldam

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Chris (Hristos) Doucouliagos

Abstract

The aid effectiveness literature (AEL) consists of empirical macroeconomic estimates of the effects of development aid. By the end of 2004, it comprised 97 econometric studies of three families of related effects. Each family has been analyzed in a separate meta-analysis. The AEL is an ideal subject for meta-analysis as it uses only a few formally similar models to estimate the same underlying effects. It is also an area with strong beliefs, often generated by altruism. When this whole literature is examined, a clear pattern emerges. After 40 years of development aid, the preponderance of the evidence indicates that aid has not been effective. We show that the distribution of results is significantly asymmetric reflecting the reluctance of the research community to publish negative results. The Dutch disease effect on exchange rates provides a plausible explanation for the observed aid ineffectiveness. Copyright © 2009 The Authors. Journal compilation © 2009 Blackwell Publishing Ltd.

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Article provided by Blackwell Publishing in its journal Journal of Economic Surveys.

Volume (Year): 23 (2009)
Issue (Month): 3 (07)
Pages: 433-461
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Handle: RePEc:bla:jecsur:v:23:y:2009:i:3:p:433-461

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Paper
- Doucouliagos , H. & Paldam, M., 2007. "The aid effectiveness literature: The sad results of 40 years of research," Cambridge Working Papers in Economics 0773, Faculty of Economics, University of Cambridge. [Downloadable!]
- Hristos Doucouliagos & Martin Paldam, 2005. "The Aid Effectiveness Literature. The Sad Result of 40 Years of Research," Economics Working Papers 2005-15, School of Economics and Management, University of Aarhus. [Downloadable!]

References listed on IDEAS
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Weisskopf, Thomas E, 1972. "An Econometric Test of Alternative Constraints on the Growth of Underdeveloped Countries," The Review of Economics and Statistics, MIT Press, vol. 54(1), pages 67-78, February. [Downloadable!] (restricted)
Haldrup, Niels & Hylleberg, Svend & Pons, Gabriel & Sanso, Andreu, 2007. "Common Periodic Correlation Features and the Interaction of Stocks and Flows in Daily Airport Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 21-32, January. [Downloadable!] (restricted)
Other versions:
- Niels Haldrup & Svend Hylleberg & Gabriel Pons & Jaume Rosselló & Andreu Sansó, 2005. "Common Periodic Correlation Features and the Interaction of Stocks and Flows in Daily Airport Data," Economics Working Papers 2005-3, School of Economics and Management, University of Aarhus. [Downloadable!]
Francesco Busato & Bruno Chiarini & Enrico Marchetti, 2005. "Fiscal Policy under Indeterminacy and Tax Evasion," Economics Working Papers 2005-9, School of Economics and Management, University of Aarhus. [Downloadable!]
Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, School of Economics and Management, University of Aarhus. [Downloadable!]

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis," Kiel Working Papers 1275, Kiel Institute for the World Economy. [Downloadable!]
Other versions:
- Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis," KOF Working papers 06-138, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
- Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does US aid buy UN general assembly votes? A disaggregated analysis," Public Choice, Springer, vol. 136(1), pages 139-164, July. [Downloadable!] (restricted)
Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does Aid for Education Educate Children? Evidence from Panel Data," Kiel Working Papers 1290, Kiel Institute for the World Economy. [Downloadable!]
Other versions:
- Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does Aid for Education Educate Children? Evidence from Panel Data," KOF Working papers 06-146, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
- Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does Aid for Education Educate Children? Evidence from Panel Data," World Bank Economic Review, Oxford University Press, vol. 22(2), pages 291-314, April. [Downloadable!] (restricted)
Knud Jørgen Munk, 2005. "Tax-tariff reform with costs of tax administration," Economics Working Papers 2005-21, School of Economics and Management, University of Aarhus. [Downloadable!]
Other versions:
- Knud Jørgen Munk, 2006. "Tax-tariff reform with costs of tax administration," Economics Working Papers 2006-14, School of Economics and Management, University of Aarhus. [Downloadable!]
- Knud Munk, 2008. "Tax-tariff reform with costs of tax administration," International Tax and Public Finance, Springer, vol. 15(6), pages 647-667, December. [Downloadable!] (restricted)
Herbertsson, Tryggvi Thor & Martin Paldam, 2005. "Does development aid help poor countries catch up?," Economics Working Papers 2005-16, School of Economics and Management, University of Aarhus. [Downloadable!]
Sanyal, Prabuddha & Babu, Suresh, 2008. "Aid effectiveness and capacity development: Implications for economic growth in developing countries," IFPRI discussion papers 838, International Food Policy Research Institute (IFPRI). [Downloadable!]
Gunnar Bårdsen & Niels Haldrup, 2006. "A Gaussian IV estimator of cointegrating relations," Economics Working Papers 2006-03, School of Economics and Management, University of Aarhus. [Downloadable!]

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