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The Macroeconomic Effects of Foreign Aid: A Survey

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  • Philipp Harms

    ()

  • Matthias Lutz

    ()

Abstract

Research on the macroeconomic effects of aid has expanded rapidly in recent years. In this paper, we provide a survey of this literature. We start by reviewing some theoretical models that suggest a positive impact of aid on investment and growth. We then discuss the empirical evidence, giving particular attention to the role of institutions and policies in determining aid effectiveness. As a general conclusion, we suggest adopting a more disaggregate perspective with respect both to different types of aid and to various aspects of governance.

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File URL: http://www1.vwa.unisg.ch/RePEc/usg/dp2004/dp11_har.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2004 with number 2004-11.

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Length: 26 pages
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:usg:dp2004:2004-11

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Related research

Keywords: foreign aid; economic growth; institutions; governance;

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References

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Citations

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Cited by:
  1. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(4), pages 596-630, December.
  2. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does Aid for Education Educate Children? Evidence from Panel Data," KOF Working papers 06-146, KOF Swiss Economic Institute, ETH Zurich.
  3. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis," Kiel Working Papers 1275, Kiel Institute for the World Economy.
  4. Peter Nunnenkamp & Gustavo Canavire & Luis Triveño, 2004. "Targeting Aid to the Needy and Deserving: Nothing But Promises?," Kiel Working Papers 1229, Kiel Institute for the World Economy.
  5. Bettina Kretschmer & Michael Hübler & Peter Nunnenkamp, 2010. "Does Foreign Aid Reduce Energy and Carbon Intensities in Developing Countries," Kiel Working Papers 1598, Kiel Institute for the World Economy.
  6. Rishav Bista, 2006. "Foreign aid policy and its growth effect in Nepal," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 3(1), pages 109-141, Julio - D.
  7. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2006. "Sectoral Aid Priorities: Are Donors Really Doing their Best to Achieve the Millennium Development Goals?," KOF Working papers 06-124, KOF Swiss Economic Institute, ETH Zurich.
  8. Hoda Abd El Hamid Ali, 2013. "Foreign Aid and Economic Growth in Egypt: A Cointegration Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 3(3), pages 743-751.

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