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Aid and Growth: What Meta-Analysis Reveals

  • Tseday Jemaneh Mekasha
  • Finn Tarp

Recent literature in the meta-analysis category where results from a range of studies are brought together throws doubt on the ability of foreign aid to foster economic growth and development. This article assesses what meta-analysis has to contribute to the literature on the effectiveness of foreign aid in terms of growth impact. We re-examine key hypotheses, and find that the effect of aid on growth is positive and statistically significant. This significant effect is genuine, and not an artefact of publication selection. We also show why our results differ from those published elsewhere.

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Article provided by Taylor & Francis Journals in its journal The Journal of Development Studies.

Volume (Year): 49 (2013)
Issue (Month): 4 (April)
Pages: 564-583

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Handle: RePEc:taf:jdevst:v:49:y:2013:i:4:p:564-583
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  1. Finn Tarp, 2006. "Aid and Development," Discussion Papers 06-12, University of Copenhagen. Department of Economics.
  2. 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 F191-F216, 06.
  3. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, School of Economics and Management, University of Aarhus.
  4. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
  5. Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
  6. Doucouliagos, Hristos & Paldam, Martin, 2011. "The ineffectiveness of development aid on growth: An update," European Journal of Political Economy, Elsevier, vol. 27(2), pages 399-404, June.
  7. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  8. Roger M. Harbord & Ross J. Harris & Jonathan A. C. Sterne, 2009. "Updated tests for small-study effects in meta-analyses," Stata Journal, StataCorp LP, vol. 9(2), pages 197-210, June.
  9. T. D. Stanley, 2001. "Wheat from Chaff: Meta-analysis as Quantitative Literature Review," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 131-150, Summer.
  10. Raghuram Rajan & Arvind Subramanian, 2005. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," IMF Working Papers 05/127, International Monetary Fund.
  11. Hansen, Henrik & Tarp, Finn, 2000. "Aid and Growth Regressions," MPRA Paper 62288, University Library of Munich, Germany.
  12. Channing, Arndt & Jones, Sam & Tarp, Finn, 2010. "Aid, Growth, and Development Have We Come Full Circle?," Working Paper Series wp2010-96, World Institute for Development Economic Research (UNU-WIDER).
  13. Tseday Jemaneh Mekasha & Finn Tarp, 2011. "Aid and Growth What Meta-Analysis Reveals," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  14. Lisa CHAUVET & Patrick GUILLAUMONT, 2003. "Aid and Growth Revisited: Policy, Economic Vulnerability and Political Instability," Working Papers 200327, CERDI.
  15. Simon Feeny & Bazoumana Ouattara, 2009. "What type of economic growth does foreign aid support?," Applied Economics Letters, Taylor & Francis Journals, vol. 16(7), pages 727-730.
  16. Karuna Gomanee & Sourafel Girma & Oliver Morrissey, 2006. "Aid, Public Spending and Human Welfare: Evidence from Quantile Regressions," Working Papers id:761, eSocialSciences.
  17. Mark McGillivray & Simon Feeny & Niels Hermes & Robert Lensink, 2006. "Controversies over the impact of development aid: it works; it doesn't; it can, but that depends …," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(7), pages 1031-1050.
  18. Channing Arndt & Sam Jones & Finn Tarp, 2006. "Aid and Development: The Mozambican Case," Discussion Papers 06-13, University of Copenhagen. Department of Economics.
  19. Howard White, 1992. "What do we know about aid's macroeconomic impact? An overview of the aid effectiveness debate," Journal of International Development, John Wiley & Sons, Ltd., vol. 4(2), pages 121-137, 03.
  20. T. D. Stanley, 2005. "Beyond Publication Bias," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 309-345, 07.
  21. Tomas Havranek & Zuzana Irsova, 2012. "Survey Article: Publication Bias in the Literature on Foreign Direct Investment Spillovers," Journal of Development Studies, Taylor & Francis Journals, vol. 48(10), pages 1375-1396, October.
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