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Are there Negative Returns to Aid? a Comment

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  • Mwanza Nkusu
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    Abstract

    Amid controversies surrounding aid effectiveness, an increasing number of empirical studies find support for the idea that aid can spur growth and that the aid-growth relationship is nonlinear. Lensink and White propose a model to illustrate the possible existence of what has been labeled an "aid Laffer curve." This short paper highlights the model''s weaknesses and suggests that the model does not fulfill the purpose of illustrating the possible existence of negative returns to aid.

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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=17785
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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 04/212.

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    Length: 12
    Date of creation: 01 Nov 2004
    Date of revision:
    Handle: RePEc:imf:imfwpa:04/212

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    Related research

    Keywords: Economic growth; Poverty; calibration; paper; equation; nonlinearity; optimization; predictions;

    This paper has been announced in the following NEP Reports:

    References

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    1. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    2. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
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    Citations

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    Cited by:
    1. Larru, Jose Maria, 2006. "La ayuda al desarrollo: ┬┐reduce la pobreza?
      [Foreign Aid: reduce poverty? (in Spanish)]
      ," MPRA Paper 2341, University Library of Munich, Germany.

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