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Foreign Aid, Donor Fragmentation, and Economic Growth

Author

Listed:
  • Annen Kurt

    (University of Guelph)

  • Kosempel Stephen

    (University of Guelph)

Abstract

This paper analyzes the impact of foreign aid on growth. It differs from the existing literature in at least two important ways. First, we differentiate between foreign aid as technical assistance and non-technical assistance, and demonstrate both theoretically and empirically that this distinction is important. Second, we test the hypothesis that the effectiveness of aid depends on its level of fragmentation. To preview our main results: non-technical assistance has no statistically significant impact on growth; but technical assistance has a positive and significant impact, except in countries where it is highly fragmented.

Suggested Citation

  • Annen Kurt & Kosempel Stephen, 2009. "Foreign Aid, Donor Fragmentation, and Economic Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-32, August.
    • Handle: RePEc:bpj:bejmac:v:9:y:2009:i:1:n:33
    DOI: 10.2202/1935-1690.1863
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    More about this item

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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