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Aid Effectiveness on Growth. A Meta Study

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Author Info
Hristos Doucouliagos
Martin Paldam () (Department of Economics, University of Aarhus, Denmark)

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Abstract

The AEL (aid effectiveness literature) is econo¬metric studies of the macroeconomic effects of development aid. It contains about 100 papers of which 68 are reduced form estimates of the effect of aid on growth in the recipient country. The raw data show that growth is unconnected to aid, but the AEL has put so much structure on the data that all results possible have emerged. The present meta study considers both the best-set of the 68 papers and the all-set of 543 regressions published. Both sets have a positive average aid-growth elasticity, but it is small and insignificant: The AEL has not established that aid works. Using meta- regression analysis it is shown that about 20 factors influence the results. Much of the variation between studies is an artifact and can be attributed to publication outlet, institu¬ tional affiliation, and specification differences. However, some of the difference between studies is real. In particular, the aid-growth association is stronger for Asian countries, and the aid-growth association is shown to have been weaker in the 1970s.

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Publisher Info
Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2005-13.

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Length: 31
Date of creation: 21 Jul 2005
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Handle: RePEc:aah:aarhec:2005-13

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Web page: http://www.econ.au.dk/afn/

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Related research
Keywords: Aid effectiveness; meta study; economic growth;

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Find related papers by JEL classification:
B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
F35 - International Economics - - International Finance - - - Foreign Aid

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  1. Knud Jørgen Munk, 2005. "Tax-tariff reform with costs of tax administration," Economics Working Papers 2005-21, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
  2. Herbertsson, Tryggvi Thor & Martin Paldam, 2005. "Does development aid help poor countries catch up?," Economics Working Papers 2005-16, School of Economics and Management, University of Aarhus. [Downloadable!]
  3. Hristos Doucouliagos & Martin Paldam, 2005. "The Aid Effectiveness Literature. The Sad Result of 40 Years of Research," Economics Working Papers 2005-15, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
  4. Ziesemer, Thomas, 2008. "Growth with Endogenous Migration Hump and the Multiple, Dynamically Interacting Effects of Aid in Poor Developing Countries," UNU-MERIT Working Paper Series 057, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  5. Jonas Dovern & Peter Nunnenkamp, 2006. "Aid and Growth Accelerations: An Alternative Approach to Assess the Effectiveness of Aid," Kiel Working Papers 1296, Kiel Institute for the World Economy. [Downloadable!]
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