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Inequality, aid and growth: Macroeconomic impact of aid grants and loans in Latin America and the Caribbean

Author

Listed:
  • Sergio Tezanos

    (University of Cantabria)

  • Ainoa Quiñones

    (University of Cantabria)

  • Marta Guijarro

    (University of Cantabria)

Abstract

Aid effectiveness in Latin America and the Caribbean (LAC) has been little studied, despite the fact that it is the developing region receiving foreign aid with the highest per capita income and inequality levels. This paper uses a growth regression model to analyze the impact of Official Development Assistance (ODA) in LAC. We evaluate ODA effectiveness in relation to the growth rate of an ‘inequality-adjusted GDP per capita’ in order to precisely define the desired impact of aid in a region with high levels of inequality. The estimation produces three main results: aid is effective, in aggregated terms, once we deal with the effect of income inequalities; the impact of concessional loans seems to be

Suggested Citation

  • Sergio Tezanos & Ainoa Quiñones & Marta Guijarro, 2013. "Inequality, aid and growth: Macroeconomic impact of aid grants and loans in Latin America and the Caribbean," Journal of Applied Economics, Universidad del CEMA, vol. 16, pages 153-177, May.
    • Handle: RePEc:cem:jaecon:v:16:y:2013:n:1:p:153-177
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    File URL: https://ucema.edu.ar/publicaciones/download/volume16/tezanos.pdf
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    Citations

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    Cited by:

    1. Asongu, Simplice & Ezeaku, Hillary, 2020. "Aid Grants vs. Technical Cooperation Grants: Implications for Inclusive Growth in Sub-Saharan Africa, 1984-2018," MPRA Paper 107528, University Library of Munich, Germany.
    2. Suleiman O. Mamman, 2023. "Response of Inclusive Growth to Development Aid in Africa and the Role of ICT Diffusion," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(4), pages 770-788.
    3. Simplice Asongu, 2016. "Reinventing Foreign Aid For Inclusive And Sustainable Development: Kuznets, Piketty And The Great Policy Reversal," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 736-755, September.
    4. Simplice A. Asongu, 2014. "Reinventing foreign aid for inclusive and sustainable development: a survey," Research Africa Network Working Papers 14/033, Research Africa Network (RAN).
    5. Gaibulloev, Khusrav & Younas, Javed, 2018. "Untying the motives of giving grants vs. loans," European Journal of Political Economy, Elsevier, vol. 51(C), pages 1-14.

    More about this item

    Keywords

    aid effectiveness; Latin America and the Caribbean (LAC); economic growth; inequality; aid grants; concessional loans; Official Development Assistance (ODA) :;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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