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The Aid Effectiveness Literature. The Sad Result of 40 Years of Research

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

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Abstract

The AEL consists of empirical macro studies of the effects of development aid. At the end of 2004 it had reached 97 studies of three families, which we have summarized in one study each using meta-analysis. Studies of the effect on investments show that they rise by 1/3 of the aid – the rest is crowded out by a fall in savings. Studies of the effect on growth show an insignificant positive effect. Studies of the effect on growth, conditional on something else, have till now shown weak results. The Dutch Disease effect of aid has been ignored. The best aggregate estimate is that since its start in the early 1960s aid has increased the standard of living in the poor countries by 20%.

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Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2005-15.

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Length: 26
Date of creation: 21 Jul 2005
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Handle: RePEc:aah:aarhec:2005-15

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

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

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Find related papers by JEL classification:
B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
F35 - International Economics - - International Finance - - - Foreign Aid

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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.:
  1. Weisskopf, Thomas E, 1972. "An Econometric Test of Alternative Constraints on the Growth of Underdeveloped Countries," The Review of Economics and Statistics, MIT Press, vol. 54(1), pages 67-78, February. [Downloadable!] (restricted)
  2. Francesco Busato & Bruno Chiarini & Enrico Marchetti, 2005. "Fiscal Policy under Indeterminacy and Tax Evasion," Economics Working Papers 2005-9, School of Economics and Management, University of Aarhus. [Downloadable!]
  3. Haldrup, Niels & Hylleberg, Svend & Pons, Gabriel & Sanso, Andreu, 2007. "Common Periodic Correlation Features and the Interaction of Stocks and Flows in Daily Airport Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 21-32, January. [Downloadable!] (restricted)
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  4. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, School of Economics and Management, University of Aarhus. [Downloadable!]
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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.)

  1. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis," Working papers 06-138, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
    Other versions:
  2. 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:
  3. 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!]
  4. Sanyal, Prabuddha & Babu, Suresh, 2008. "Aid effectiveness and capacity development: Implications for economic growth in developing countries," IFPRI discussion papers 838, International Food Policy Research Institute (IFPRI). [Downloadable!]
  5. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does Aid for Education Educate Children? Evidence from Panel Data," Kiel Working Papers 1290, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  6. Gunnar Bårdsen & Niels Haldrup, 2006. "A Gaussian IV estimator of cointegrating relations," Economics Working Papers 2006-03, School of Economics and Management, University of Aarhus. [Downloadable!]
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