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Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid

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  • Boriana Yontcheva
  • Nadia Masud
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    Abstract

    This paper assesses the effectiveness of foreign aid in reducing poverty through its impact on human development indicators. We use a dataset of both bilateral aid and NGO aid flows. Our results show that NGO aid reduces infant mortality and does so more effectively than official bilateral aid. The impact on illiteracy is less significant. We also test whether foreign aid reduces government efforts in achieving developmental goals and find mixed evidence of a substitution effect.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 05/100.

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    Length: 22
    Date of creation: 01 May 2005
    Date of revision:
    Handle: RePEc:imf:imfwpa:05/100

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    Related research

    Keywords: Poverty reduction; Economic models;

    This paper has been announced in the following NEP Reports:

    References

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    Citations

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    Cited by:
    1. Yousuf, Ahmed Sadek, 2012. "Assessing Impact of Health Oriented Aid on Infant Mortality Rates," MPRA Paper 43212, University Library of Munich, Germany, revised 10 Dec 2012.
    2. Nunnenkamp, Peter & Weingarth, Janina & Weisser, Johannes, 2009. "Is NGO aid not so different after all? Comparing the allocation of Swiss aid by private and official donors," European Journal of Political Economy, Elsevier, vol. 25(4), pages 422-438, December.
    3. Ma. Cecilia Calderón & Alberto Chong, 2006. "¿Contribuye la ayuda extranjera a reducir la desigualdad del ingreso?," Research Department Publications 4438, Inter-American Development Bank, Research Department.
    4. Ahmed, Vaqar & Wahab, Mohammad Abdul, 2011. "Foreign assistance and economic growth: evidence from Pakistan 1972 - 2010," MPRA Paper 30344, University Library of Munich, Germany.
    5. Mesplé-Somps, Sandrine & Gubert, Flore & Chauvet, Lisa, 2010. "Are Remittances More Effective Than Aid to Reduce Child Mortality? An Empirical Assessment Using Inter and Intra-Country Data," Open Access publications from Université Paris-Dauphine urn:hdl:123456789/4301, Université Paris-Dauphine.
    6. Channing Arndt & Sam Jones & Finn Tarp, 2009. "Aid and Growth: Have We Come Full Circle?," Discussion Papers 09-22, University of Copenhagen. Department of Economics.
    7. Ma. Cecilia Calderón & Alberto Chong, 2006. "Does Foreign Aid Help Reduce Income Inequality?," Research Department Publications 4437, Inter-American Development Bank, Research Department.
    8. Patrick Guillaumont, 2011. "Aid effectiveness for poverty reduction:macroeconomic overview and emerging issues," Working Papers halshs-00554285, HAL.
    9. Bah, El-hadj M. & Ward, Jeremy, 2011. "Effectiveness of foreign aid in Small Island Developing States," MPRA Paper 32062, University Library of Munich, Germany.
    10. Yousuf, Ahmed Sadek, 2012. "Impact of Health Aid on Infant Mortality Rate," MPRA Paper 42945, University Library of Munich, Germany, revised 12 Oct 2012.
    11. David Locke Newhouse & Prachi Mishra, 2007. "Health Aid and Infant Mortality," IMF Working Papers 07/100, International Monetary Fund.
    12. Elsy T. KIZHAKETHALACKAL, 2009. "A Note On Infant Mortality And Foreign Health-Aid," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2).

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