This study provides a critical analysis of the growth regressions in Burnside and Dollar [2000]. First, we analyse the relationship between aid and government expenditure in a modified neo-classical growth model. One of the main results of the analysis is that while good policies spur growths they may at the same time reduce the effectiveness of foreign aid. Second, we show that the econometric results in Burnside and Dollar emphasising the crucial role of interaction between aid and good policies in the growth process are fragile, as they are extremely data dependent. Finally, we demonstrate that the Burnside and Dollar data lend support to the idea that the association between aid and growth can be approximated by decreasing returns to aid. This finding conforms well to regression results in other recent studies.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 37 (2001) Issue (Month): 6 (August) Pages: 17-41 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
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.) This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.