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On The Empirics of Foreign Aid and Growth*

* This paper is a replication of an original study

Author

Listed:
  • Carl-Johan Dalgaard
  • Henrik Hansen
  • Finn Tarp

Abstract

The present paper re-examines the effectiveness of foreign aid theoretically and empirically. Using a standard OLG model we show that aid inflows will in general affect long-run productivity. The size and direction of the impact may depend on policies, 'deep' structural characteristics and the size of the inflow. The empirical analysis investigates these possibilities. Overall we find that aid has been effective in spurring growth, but the magnitude of the effect depends on climate-related circumstances. Finally, we argue that the Collier-Dollar allocation rule should be seriously reconsidered by donor agencies if aid effectiveness is related to climate. Copyright 2004 Royal Economic Society.

Suggested Citation

  • Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    • Handle: RePEc:ecj:econjl:v:114:y:2004:i:496:p:f191-f216
    as

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    Replication

    This item is a replication of:
  • David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.

    • More about this item

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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    1. On The Empirics of Foreign Aid and Growth (EJ 2004) in ReplicationWiki

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