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Aid Proliferation and Economic Growth: A Cross-Country Analysis

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  • KIMURA Hidemi
  • SAWADA Yasuyuki
  • MORI Yuko

Abstract

In this paper, we examine whether aid proliferation hinders aid effectiveness in promoting economic growth. We employ a wide variety of specifications of the standard aid-growth regression using Roodman's (2007a) dataset. Specifically, we include a donor-concentration index as a proxy for donor proliferation and the interaction term between aid and a donor-concentration index as additional independent variables. Our best empirical results are in favor of a hypothesis that aid proliferation involves a negative effect on economic growth of the recipient countries with proper correction for possible biases arising from omitted variable and endogeneity problems.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 07044.

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Length: 40 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:eti:dpaper:07044

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Citations

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Cited by:
  1. Rahman, Aminur & Sawada, Yasuyuki, 2012. "Can donor coordination solve the aid proliferation problem?," Economics Letters, Elsevier, vol. 116(3), pages 609-612.
  2. Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.
  3. Larrú, José María, 2013. "The developmental contribution of the Offset Agreements: the case of Colombia," MPRA Paper 51456, University Library of Munich, Germany.
  4. Knack, Stephen & Smets, Lodewijk, 2012. "Aid tying and donor fragmentation," Policy Research Working Paper Series 5934, The World Bank.
  5. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Documents de travail du Centre d'Economie de la Sorbonne 13046, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  6. Anderson, Edward, 2012. "Aid fragmentation and donor transaction costs," Economics Letters, Elsevier, vol. 117(3), pages 799-802.
  7. Christopher Kilby, 2010. "What Determines the Size of Aid Projects?," Villanova School of Business Department of Economics and Statistics Working Paper Series 10, Villanova School of Business Department of Economics and Statistics.
  8. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00825816, HAL.

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