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The macroeconomic effects of adjustment lending: A review and evaluation

  • Hans Genberg

Does external aid have an impact on economic growth, if so, through what channels? Does the domestic policy environment matter? In the past ten years, these questions have been the subject of a large number of empirical studies. This article surveys these studies and identifies the areas where there is consensus and those where there is not. It is argued that to move forward, empirical work must be based more explicitly on structural models of the link between aid and growth, notably by incorporating relationships between aid, government fiscal responses, private sector investment, and economic growth.

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Article provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 8 (2005)
Issue (Month): 1 ()
Pages: 1-40

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Handle: RePEc:taf:jpolrf:v:8:y:2005:i:1:p:1-40
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  1. Christopher Adam & David Bevan, 2002. "Fiscal Deficits and Growth in Developing Countries," Economics Series Working Papers 120, University of Oxford, Department of Economics.
  2. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
  3. Robert Lensink & Oliver Morrissey, 2000. "Aid instability as a measure of uncertainty and the positive impact of aid on growth," Journal of Development Studies, Taylor & Francis Journals, vol. 36(3), pages 31-49.
  4. Mark McGillivray & Oliver Morrissey, 2000. "Aid fungibility in Assessing Aid: red herring or true concern?," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 413-428.
  5. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
  6. Diego Saravia & Ashoka Mody, 2003. "Catalyzing Capital Flows: Do IMF-Supported Programs Work As Commitment Devices?," IMF Working Papers 03/100, International Monetary Fund.
  7. William Easterly, 2002. "What did Structural Adjustment Adjust? The Association of Policies and Growth with Repeated IMF and World Bank Adjustment Loans," Working Papers 11, Center for Global Development.
  8. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
  9. Svensson, Jakob, 2003. "Why conditional aid does not work and what can be done about it?," Journal of Development Economics, Elsevier, vol. 70(2), pages 381-402, April.
  10. William Easterly & Ross Levine & David Roodman, 2003. "New Data, New Doubts: Revisiting "Aid, Policies, and Growth"," Working Papers 26, Center for Global Development.
  11. Graham Bird & Dane Rowlands, 1997. "The Catalytic Effect of Lending by the International Financial Institutions," The World Economy, Wiley Blackwell, vol. 20(7), pages 967-991, November.
  12. Graham Bird & Dane Rowlands, 2001. "Catalysis or Direct Borrowing: The Role of the IMF in Mobilising Private Capital," The World Economy, Wiley Blackwell, vol. 24(1), pages 81-98, 01.
  13. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 17-41.
  14. Alex Mourmouras & Anna Ivanova & George C. Anayotos & Wolfgang Mayer, 2003. "What Determines the Implementation of IMF-Supported Programs?," IMF Working Papers 03/8, International Monetary Fund.
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