Does development aid help poor countries catch up?
AbstractAid flows are included into the standard cross-country catch-up relation. Robust¬ness of the result is tested by changing time periods and by adding extra variables. The main results are: Absolute conver¬gence and absolute aid effec¬ti¬ve¬ness are both rejected. While conditional convergence is accepted, conditional aid effecti¬ve¬ness is found to be weak. The two relations are largely inde¬pendent. However, aid has a clear activity effect in the short run. Finally, we try to divide the countries into an A-group where aid is effective and a B-group where it harms. Several criteria of division were explored, but none were very successful – the most satisfactory is the one that divides countries according to their level of development.
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Bibliographic InfoPaper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2005-16.
Date of creation: 21 Jul 2005
Date of revision:
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Web page: http://www.econ.au.dk/afn/
Convergence; growth; development aid effectiveness;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F35 - International Economics - - International Finance - - - Foreign Aid
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-22 (All new papers)
- NEP-DEV-2005-10-22 (Development)
- NEP-LAM-2005-10-22 (Central & South America)
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.:
- 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.
- Hristos Doucouliagos & Martin Paldam, 2009. "The Aid Effectiveness Literature: The Sad Results Of 40 Years Of Research," Journal of Economic Surveys, Wiley Blackwell, vol. 23(3), pages 433-461, 07.
- Doucouliagos , H. & Paldam, M., 2007. "The aid effectiveness literature: The sad results of 40 years of research," Cambridge Working Papers in Economics 0773, Faculty of Economics, University of Cambridge.
- 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.
- Francesco Busato & Bruno Chiarini & Enrico Marchetti, 2005. "Fiscal Policy under Indeterminacy and Tax Evasion," Economics Working Papers 2005-09, School of Economics and Management, University of Aarhus.
- Hristos Doucouliagos & Martin Paldam, 2010.
"Conditional aid effectiveness: A meta-study,"
Journal of International Development,
John Wiley & Sons, Ltd., vol. 22(4), pages 391-410.
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