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Aid Effectiveness on Accumulation: A Meta Study

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  • Hristos Doucouliagos
  • Martin Paldam

Abstract

The AEL (aid effectiveness literature) studies the macroeconomic effects of development aid using cross‐country or panel data econometrics. It contains 97 papers of which 43 study whether development aid leads to increasing accumulation. The aggregate results of the 43 studies are that aid increases investment with about 25% of the aid, while most of the remaining 75% of the effect is crowded out by a fall in savings. However, these aggregate results are so variable that it is dubious if accumulation rises.

Suggested Citation

  • Hristos Doucouliagos & Martin Paldam, 2006. "Aid Effectiveness on Accumulation: A Meta Study," Kyklos, Wiley Blackwell, vol. 59(2), pages 227-254, May.
    • Handle: RePEc:bla:kyklos:v:59:y:2006:i:2:p:227-254
    DOI: 10.1111/j.1467-6435.2006.00326.x
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    1. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, Department of Economics and Business Economics, Aarhus University.
    2. Hristos Doucouliagos & Martin Paldam, 2010. "Conditional aid effectiveness: A meta-study," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(4), pages 391-410.
    3. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
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    More about this item

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F35 - International Economics - - International Finance - - - Foreign Aid

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