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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. Copyright 2009 UNU-WIDER. Journal compilation 2009 Blackwell Publishing Ltd.

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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(s1), pages 510-525, August.
  • Handle: RePEc:bla:rdevec:v:13:y:2009:i:s1:p:510-525
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    Cited by:

    1. KASMAOUI, Kamal & ERRAMI, Youssef, 2017. "Social Cohesion, Institutions and Public Policies: New Evidence from the MENA region," MPRA Paper 80950, University Library of Munich, Germany.
    2. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction: macroeconomic overview and emerging issues," Working Papers P05, FERDI.
    3. Baliamoune-Lutz, Mina, 2011. "Trust-based social capital, institutions, and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 335-346, August.
    4. Baliamoune-Lutz, Mina, 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 074, World Institute for Development Economic Research (UNU-WIDER).
    5. Wasseem Mina, 2014. "But Most of All We Love Each Other: Does Social Cohesion Pay off? Evidence from FDI Flows to Middle Income Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1424, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. 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.
    7. 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.
    8. 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).
    9. repec:wsi:jicepx:v:03:y:2012:i:01:n:s1793993312400030 is not listed on IDEAS
    10. Addison, Tony & Baliamoune-Lutz, Mina, 2013. "Aid and Dutch Disease: Evidence from Moroccan and Tunisian Time-Series Data," WIDER Working Paper Series 132, World Institute for Development Economic Research (UNU-WIDER).
    11. Mina Baliamoune-Lutz & George Mavrotas, 2009. "Aid Effectiveness: Looking at the Aid-Social Capital-Growth Nexus," Review of Development Economics, Wiley Blackwell, vol. 13(s1), pages 510-525, August.
    12. Axel Dreher & Valentin F. Lang & Sebastian Ziaja, 2017. "Foreign Aid in Areas of Limited Statehood," CESifo Working Paper Series 6340, CESifo Group Munich.
    13. Baliamoune-Lutz, Mina, 2009. "Institutions, trade, and social cohesion in fragile states: Implications for policy conditionality and aid allocation," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 877-890, November.
    14. Mina Baliamoune-Lutz, 2012. "Do Institutions And Social Cohesion Enhance The Effectiveness Of Aid? New Evidence From Africa," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-19.
    15. Baliamoune-Lutz, Mina N. & McGillivray, Mark, 2008. "State Fragility: Concept and Measurement," WIDER Working Paper Series 044, World Institute for Development Economic Research (UNU-WIDER).
    16. Mina Baliamoune-Lutz, 2007. "Institutions, Trade, and Social Cohesion in Fragile States," ICER Working Papers 24-2007, ICER - International Centre for Economic Research.
    17. repec:unu:wpaper:wp2012-07 is not listed on IDEAS
    18. 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.
    19. Mina Baliamoune, 2009. "Policy Reform and Aid Effectiveness in Africa," ICER Working Papers 19-2009, ICER - International Centre for Economic Research.

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