Macro Aid Effectiveness Research: A Guide for the Perplexed
AbstractLike many public policy debates, that over whether foreign aid works carries on in two worlds. Within the research world, it plays out in the form of papers full of technical language, formulas, and numbers. Outside, the arguments are plainer and the audience broader, but those academic studies remain a touchstone. While avoiding jargon, this paper reviews recent, contending studies of how much foreign aid affects country-level outcomes such as economic growth and school attendance rates. This particular kind of study is ambitious: it is far easier to evaluate a school-building project, say, on whether the school was built and children filled its seats than to determine whether all aid, or large subcomponents of it, made the economy grow faster. Because of its ambition, this literature has attracted attention from those hoping for clear answers on whether aid "works.' On balance, the quantitative approach to exploring grand questions about aid effectiveness, which began 40 years ago, was worth trying and is probably worth pursuing somewhat further. But the literature will probably continue to disappoint as often as it offers hope. Perhaps the biggest challenge is going beyond documenting correlations to demonstrating causation—not just that aid went hand-in-hand with economic growth, but caused it. Aid has eradicated diseases, prevented famines, and done many other good things. But given the limited and noisy data available, its effects on growth in particular probably cannot be detected.
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Bibliographic InfoPaper provided by Center for Global Development in its series Working Papers with number 134.
Length: 21 pages
Date of creation: Dec 2007
Date of revision:
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Web page: http://www.cgdev.org
foreign aid; economic growth; data mining;
Other versions of this item:
- David Roodman, 2007. "Macro Aid Effectiveness Research: A Guide for the Perplexed," Working Papers 135, Center for Global Development.
- B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
- F35 - International Economics - - International Finance - - - Foreign Aid
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-12-19 (All new papers)
- NEP-DEV-2007-12-19 (Development)
- NEP-FDG-2007-12-19 (Financial Development & Growth)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Should aid focus on economic development? (part 2)
by Terence Wood in Development Policy Blog on 2011-05-25 06:11:26
- Léonce Ndikumana, 2013. "Applying Evaluation to Development and Aid: Can Evaluation Bridge the Micro-macro Gaps in Aid Effectiveness?," Published Studies article-leonce-ndikumana-, Political Economy Research Institute, University of Massachusetts at Amherst.
- Patrick Guillaumont, 2011. "Aid effectiveness for poverty reduction:macroeconomic overview and emerging issues," Working Papers halshs-00554285, HAL.
- Thomas Ziesemer, 2011.
"Growth with endogenous migration hump and the multiple, dynamically interacting effects of aid in poor developing countries,"
Taylor and Francis Journals, vol. 43(30), pages 4865-4878.
- 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.
- 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).
- Bah, El-hadj M. & Ward, Jeremy, 2011. "Effectiveness of foreign aid in Small Island Developing States," MPRA Paper 32062, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Roodman).
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