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Aid, Growth, and Development: Have We Come Full Circle?

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Author Info

  • Channing Arndt

    (University of Copenhagen)

  • Sam Jones

    (University of Copenhagen)

  • Finn Tarp

    (University of Copenhagen and UNU-WIDER)

Abstract

The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro- and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program evaluation literature, we re-examine key hypotheses. In our findings, aid has a positive and statistically significant causal effect on growth over the long run, with confidence intervals conforming to levels suggested by growth theory. Aid remains a key tool for enhancing the development prospects of poor countries.

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Bibliographic Info

Article provided by De Gruyter in its journal Journal of Globalization and Development.

Volume (Year): 1 (2010)
Issue (Month): 2 ()
Pages: 5

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Handle: RePEc:bpj:globdv:v:1:y:2010:i:2:n:5

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Web page: http://www.degruyter.com

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Web: http://www.degruyter.com/view/j/jgd

Related research

Keywords: O1; O4; F35; C21; foreign aid; growth; aid effectiveness; causal effects;

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References

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  1. Enrique Moral-Benito, 2012. "Determinants of Economic Growth: A Bayesian Panel Data Approach," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 566-579, May.
  2. Berthelemy, Jean-Claude & Tichit, Ariane, 2002. "Bilateral Donors' Aid Allocation Decisions: A Three-dimensional Panel Analysis," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Increasing aid, wasting money?
    by Terence Wood in Development Policy Blog on 2011-07-19 19:50:06
  2. Should aid focus on economic development? (part 2)
    by Terence Wood in Development Policy Blog on 2011-05-25 06:11:26
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Katarina Juselius & Niels Framroze & Finn Tarp, 2011. "The Long-Run Impact of Foreign Aid in 36 African Countries: Insights from Multivariate Time Series Analysis," Working Papers UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  2. Pietro Alessandrini & Andrea Presbitero, 2012. "Low-Income Countries and an SDR-based International Monetary System," Open Economies Review, Springer, vol. 23(1), pages 129-150, February.
  3. Manning, Richard, 2012. "Aid as a Second-Best Solution: Seven Problems of Effectiveness and How to Tackle Them," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Wim Naudé, 2011. "Foreign Aid for Innovation: The Missing Ingredient in Private Sector Development?," Working Papers 2011/35, Maastricht School of Management.
  5. Roe, Alan R., 2011. "Aid and the Fiscal and Monetary Responses to Dutch Disease," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Mark McGillivray & David Fielding & Sebastian Torres & Stephen Knowles, 2011. "Does Aid Work for the Poor?," Working Papers 1114, University of Otago, Department of Economics, revised Dec 2011.
  7. Denizer, Cevdet & Dethier, Jean-Jacques & Gelb, Alan, 2011. "Development Economics and the International Development Association," Policy Research Working Paper Series 5541, The World Bank.
  8. Joaquin Morales Belpaire, 2012. "Decentralized Aid and Democracy," Working Papers 1212, University of Namur, Department of Economics.
  9. Subhayu Bandyopadhyay & Sajal Lahiri & Javed Younas, 2011. "Should easier access to international credit replace foreign aid?," Working Papers 2011-023, Federal Reserve Bank of St. Louis.
  10. González, Mariano & Larrú, José María, 2012. "Egalitarian aid. The impact of aid on Latin American inequality," MPRA Paper 41660, University Library of Munich, Germany.
  11. Lukasz Marc, 2012. "New Evidence on Fungibility at the Aggregate Level," Tinbergen Institute Discussion Papers 12-083/2, Tinbergen Institute.
  12. Tseday Jemaneh Mekasha & Finn Tarp, 2011. "Aid and Growth What Meta-Analysis Reveals," Working Papers UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  13. Hristos Doucouliagos & Martin Paldam, 2012. "The robust result in meta-analysis of aid effectiveness: A response to Mekasha and Tarp," Economics Series 2012_4, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  14. Channing Arndt & Sam Jones & Finn Tarp, 2011. "Aid Effectiveness: Opening the Black Box," Working Papers UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  15. Gravier-Rymaszewska, Joanna, 2012. "How Aid Supply Responds to Economic Crises: A Panel VAR Approach," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).

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