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Explaining development aid allocation by growth: A meta study

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  • Hristos Doucouliagos
  • Martin Paldam

    ()
    (School of Economics and Management, University of Aarhus, Denmark)

Abstract

The empirical literature explaining the driving forces behind the flows of development aid consists of (at least) 166 studies. One factor that has been analyzed in 30 of these studies is growth in the recipient country. A priori the effect may as well be positive as negative. This is an interesting factor for two reasons: (1) It is relatively easy to interpret the results, and (2) it is an important piece in the picture which suggests aid ineffectiveness. The paper is a meta- analysis of the 211 growth-aid estimates found in the 30 empirical studies. Additionally, we present new evidence using a panel data for 147 countries for the period 1967-2004. The result from both the meta-analysis and the primary data analysis is that growth does generate aid, so the dominating sign is positive. This result is driven partly by the large development banks.

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File URL: ftp://ftp.econ.au.dk/afn/wp/07/wp07_13.pdf
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Bibliographic Info

Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2007-13.

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Length: 27
Date of creation: 10 Oct 2007
Date of revision:
Handle: RePEc:aah:aarhec:2007-13

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

Related research

Keywords: Aid allocation; growth; meta-analysis;

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Cited by:
  1. Hristos Doucouliagos & T.D. Stanley, 2008. "Theory Competition and Selectivity: Are All Economic Facts Greatly Exaggerated?," Economics Series 2008_06, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  2. Bjørnskov, Christian, 2010. "Do elites benefit from democracy and foreign aid in developing countries?," Journal of Development Economics, Elsevier, vol. 92(2), pages 115-124, July.

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