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Aid Effectiveness: Looking at the Aid–Social Capital–Growth Nexus

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  • Mina Baliamoune‐Lutz
  • George Mavrotas

Abstract

The authors examine the impact of institutional quality and social capital on aid effectiveness. They find strong evidence that social capital and institutions enhance aid effectiveness. Moreover, once they account for the role of social capital and institutions, the impact of policies tends to disappear. These findings have important policy implications as they indicate that conditioning aid allocation on “good policies” may not lead to an optimal (or fair) allocation of aid, as countries with high social capital at the macrolevel could actually make good use of aid regardless of the quality of policy. This casts doubt on the conclusions in Burnside and Dollar (2000) and the policy lessons derived from their findings.

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  • Mina Baliamoune‐Lutz & George Mavrotas, 2009. "Aid Effectiveness: Looking at the Aid–Social Capital–Growth Nexus," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 510-525, August.
  • Handle: RePEc:bla:rdevec:v:13:y:2009:i:3:p:510-525
    DOI: 10.1111/j.1467-9361.2009.00504.x
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    Cited by:

    1. Kargbo, Philip Michael, 2012. "Impact of Foreign Aid on Economic Growth in Sierra Leone: Empirical Analysis," WIDER Working Paper Series 007, World Institute for Development Economic Research (UNU-WIDER).
    2. repec:unu:wpaper:wp2012-07 is not listed on IDEAS
    3. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction:macroeconomic overview and emerging issues," Working Papers 200917, CERDI.
    4. Isabel Neira Gómez & María Cadaval Sampedro & Marta Portela, 2010. "Ayuda al desarrollo, capital humano, capital social y crecimiento: una visión de la situación en Latinoamérica," Investigaciones de Economía de la Educación volume 5, in: María Jesús Mancebón-Torrubia & Domingo P. Ximénez-de-Embún & José María Gómez-Sancho & Gregorio Gim (ed.), Investigaciones de Economía de la Educación 5, edition 1, volume 5, chapter 53, pages 1044-1060, Asociación de Economía de la Educación.
    5. Foa, R., 2012. "The Role of Social Institutions in Determining Aid Effectiveness," ISD Working Paper Series 2012-02, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    6. Ferreira, I.A.R. & Simoes, M.C.N., 2013. "Aid And Growth: A Comparative Study Between Sub-Saharan Africa And Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 113-132.
    7. Mina Baliamoune-Lutz, 2007. "Institutions, Trade, and Social Cohesion in Fragile States," ICER Working Papers 24-2007, ICER - International Centre for Economic Research.
    8. Mina Baliamoune, 2009. "Policy Reform and Aid Effectiveness in Africa," ICER Working Papers 19-2009, ICER - International Centre for Economic Research.
    9. Philip Michael Kargbo, 2012. "Impact of Foreign Aid on Economic Growth in Sierra Leone: Empirical Analysis," WIDER Working Paper Series wp-2012-007, World Institute for Development Economic Research (UNU-WIDER).
    10. Mina Baliamoune-Lutz, 2013. "The Effectiveness of Foreign Aid to Women's Equality Organizations in the MENA: Does Aid Promote Women's Political Participation?," WIDER Working Paper Series wp-2013-074, World Institute for Development Economic Research (UNU-WIDER).
    11. Mina Baliamoune-Lutz & Mark McGillivray, 2008. "State Fragility: Concept and Measurement," WIDER Working Paper Series RP2008-44, World Institute for Development Economic Research (UNU-WIDER).
    12. Tony Addison & Mina Baliamoune-Lutz, 2013. "Aid and Dutch Disease: Evidence from Moroccan and Tunisian Time-Series Data," WIDER Working Paper Series wp-2013-132, World Institute for Development Economic Research (UNU-WIDER).

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