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Aid, Growth, and Development: Have We Come Full Circle?

Author

Listed:
  • Arndt Channing

    (University of Copenhagen)

  • Jones Sam

    (University of Copenhagen)

  • Tarp Finn

    (University of Copenhagen and UNU-WIDER)

Abstract

The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro- and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program evaluation literature, we re-examine key hypotheses. In our findings, aid has a positive and statistically significant causal effect on growth over the long run, with confidence intervals conforming to levels suggested by growth theory. Aid remains a key tool for enhancing the development prospects of poor countries.

Suggested Citation

  • Arndt Channing & Jones Sam & Tarp Finn, 2010. "Aid, Growth, and Development: Have We Come Full Circle?," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-29, December.
  • Handle: RePEc:bpj:globdv:v:1:y:2010:i:2:n:5
    DOI: 10.2202/1948-1837.1121
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