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Aid Proliferation and Economic Growth: A Cross-Country Analysis

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  • Kimura, Hidemi
  • Mori, Yuko
  • Sawada, Yasuyuki

Abstract

We examine whether aid proliferation hinders economic growth by applying the standard aid-growth regression to Roodman’s (2007) dataset, with proper correction for possible biases arising from omitted variable and endogeneity problems. Specifically, we include a donor-concentration index to capture a low degree of donor proliferation and its interaction terms with aid variables as additional independent variables. Our empirical results show that the effect of aid concentration on economic growth is positive and favors the hypothesis that aid proliferation has a negative effect on the economic growth of recipient countries, especially in Africa.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 1 ()
Pages: 1-10

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:1:p:1-10

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Web page: http://www.elsevier.com/locate/worlddev

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Keywords: aid; aid proliferation; economic growth;

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Citations

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Cited by:
  1. Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.
  2. Rahman, Aminur & Sawada, Yasuyuki, 2012. "Can donor coordination solve the aid proliferation problem?," Economics Letters, Elsevier, vol. 116(3), pages 609-612.
  3. Anderson, Edward, 2012. "Aid fragmentation and donor transaction costs," Economics Letters, Elsevier, vol. 117(3), pages 799-802.
  4. Christopher Kilby, 2010. "What Determines the Size of Aid Projects?," Villanova School of Business Department of Economics and Statistics Working Paper Series 10, Villanova School of Business Department of Economics and Statistics.
  5. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Documents de travail du Centre d'Economie de la Sorbonne 13046, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  6. Larrú, José María, 2013. "The developmental contribution of the Offset Agreements: the case of Colombia," MPRA Paper 51456, University Library of Munich, Germany.
  7. Knack, Stephen & Smets, Lodewijk, 2013. "Aid Tying and Donor Fragmentation," World Development, Elsevier, vol. 44(C), pages 63-76.
  8. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00825816, HAL.

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