IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Aid effectiveness disputed

  • Henrik Hansen

    (Department of Economics and Natural Resources, The Royal Veterinary and Agricultural University, Copenhagen, Denmark)

  • Finn Tarp

    (Institute of Economics, University of Copenhagen, Denmark)

There is a widespread perception among academic researchers and aid practitioners alike that empirical cross-country analysis fails to find any significant link between aid flows and growth, and that aid is successful only when associated with good policies in the recipient countries. These positions do not stand up to careful scrutiny of existing studies. In this paper, we offer a re-examination of the literature on the aid-savings, aid-investment, and aid-growth relationships, and a comparative appraisal of more recent research contributions. Using an analytic framework for evaluating the empirical work, a coherent and positive picture of the aid-growth link emerges. There is a robust aid-growth link even in countries hampered by an unfavourable policy environment. Copyright © 2000 John Wiley & Sons, Ltd.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 12 (2000)
Issue (Month): 3 ()
Pages: 375-398

as
in new window

Handle: RePEc:wly:jintdv:v:12:y:2000:i:3:p:375-398
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/5102/home

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Levy, Victor, 1987. "Does Concessionary Aid Lead to Higher Investment Rates in Low-Income Countries?," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 152-56, February.
  2. Charles C. Chang & Eduardo Fernández-Arias & Luis Servén, 1998. "Measuring Aid Flows: A New Approach," IDB Publications (Working Papers) 6447, Inter-American Development Bank.
  3. Barro, R. & Mankiw, G., 1992. "Capital Mobility in Neoclassical Models of Growth," Harvard Institute of Economic Research Working Papers 1615, Harvard - Institute of Economic Research.
  4. Xavier Sala-i-Martin, 1997. "I just ran four million regressions," Economics Working Papers 201, Department of Economics and Business, Universitat Pompeu Fabra.
  5. Papanek, Gustav F, 1973. "Aid, Foreign Private Investment, Savings, and Growth in Less Developed Countries," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 120-30, Jan.-Feb..
  6. Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, vol. 75(3), pages 308-13, June.
  7. Chenery, Hollis B & Eckstein, Peter, 1970. "Development Alternatives for Latin America," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 966-1006, Part II, .
  8. Stoneman, Colin, 1975. "Foreign capital and economic growth," World Development, Elsevier, vol. 3(1), pages 11-26, January.
  9. Voivodas, Constantin S., 1973. "Exports, foreign capital inflow and economic growth," Journal of International Economics, Elsevier, vol. 3(4), pages 337-349, November.
  10. Gupta, Kanhaya L, 1975. "Foreign Capital Inflows, Dependency Burden, and Saving Rates in Developing Countries: A Simultaneous Equation Model," Kyklos, Wiley Blackwell, vol. 28(2), pages 358-74.
  11. Singh, Ram D, 1985. "State Intervention, Foreign Economic Aid, Savings and Growth in LDCs: Some Recent Evidence," Kyklos, Wiley Blackwell, vol. 38(2), pages 216-32.
  12. Halevi, Nadav, 1976. "The Effects on Investment and Consumption of Import Surpluses of Developing Countries," Economic Journal, Royal Economic Society, vol. 86(344), pages 853-58, December.
  13. Mosley, Paul & Hudson, John & Horrell, Sara, 1987. "Aid, the Public Sector and the Market in Less Developed Countries," Economic Journal, Royal Economic Society, vol. 97(387), pages 616-41, September.
  14. Over, A Mead, Jr, 1975. " An Example of the Simultaneous-Equation Problem: A Note on "Foreign Assistance: Objectives and Consequences."," Economic Development and Cultural Change, University of Chicago Press, vol. 23(4), pages 751-56, July.
  15. Martin Browning & Annamaria Lusardi, 1995. "Household Saving: Micro Theories and Micro Facts," Department of Economics Working Papers 1995-02, McMaster University.
  16. Feyzioglu, Tarhan & Swaroop, Vinaya & Zhu, Min, 1998. "A Panel Data Analysis of the Fungibility of Foreign Aid," World Bank Economic Review, World Bank Group, vol. 12(1), pages 29-58, January.
  17. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  18. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2, 4-6.
  19. Weisskopf, Thomas E., 1972. "The impact of foreign capital inflow on domestic savings in underdeveloped countries," Journal of International Economics, Elsevier, vol. 2(1), pages 25-38, February.
  20. Paul Mosley & John Hudson & Sara Horrell, 1992. "Aid, the public sector and the market in less developed countries: A return to the scene of the crime," Journal of International Development, John Wiley & Sons, Ltd., vol. 4(2), pages 139-150, 03.
  21. Chang, Charles C. & Fernandez-Arias, Eduardo & Serven, Luis, 1999. "Measuring aid flows : a new approach," Policy Research Working Paper Series 2050, The World Bank.
  22. Massell, Benton F & Pearson, Scott R & Fitch, James B, 1972. "Foreign Exchange and Economic Development: An Empirical Study of Selected Latin American Countries," The Review of Economics and Statistics, MIT Press, vol. 54(2), pages 208-12, May.
  23. Mosley, Paul, 1980. "Aid, Savings and Growth Revisited," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 42(2), pages 79-95, May.
  24. Khan, Haider Ali & Hoshino, Eiichi, 1992. "Impact of foreign aid on the fiscal behavior of LDC governments," World Development, Elsevier, vol. 20(10), pages 1481-1488, October.
  25. Levy, Victor, 1988. "Aid and growth in Sub-Saharan Africa: The recent experience," European Economic Review, Elsevier, vol. 32(9), pages 1777-1795, November.
  26. Robinson, Sherman, 1971. "Sources of Growth in Less Developed Countries: A Cross-Section Study," The Quarterly Journal of Economics, MIT Press, vol. 85(3), pages 391-408, August.
  27. Griffin, Keith, 1970. "Foreign Capital, Domestic Savings and Economic Development," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 32(2), pages 99-112, May.
  28. Masson, Paul R & Bayoumi, Tamim & Samiei, Hossein, 1998. "International Evidence on the Determinants of Private Saving," World Bank Economic Review, World Bank Group, vol. 12(3), pages 483-501, September.
  29. Papanek, Gustav F, 1972. "The Effect of Aid and other Resource Transfers on Savings and Growth in Less Developed Countries," Economic Journal, Royal Economic Society, vol. 82(327), pages 934-50, September.
  30. Snyder, Donald, 1990. "Foreign Aid and Domestic Savings: A Spurious Correlation?," Economic Development and Cultural Change, University of Chicago Press, vol. 39(1), pages 175-81, October.
  31. Xavier Sala-i-Martin, 1995. "Transfers, social safety nets and economic growth," Economics Working Papers 139, Department of Economics and Business, Universitat Pompeu Fabra.
  32. 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.
  33. Gupta, K L, 1970. "Foreign Capital and Domestic Savings: A Test of Haavelmo's Hypothesis with Cross-Country Data: A Comment," The Review of Economics and Statistics, MIT Press, vol. 52(2), pages 214-16, May.
  34. Newlyn, Walter T, 1973. "The Effect of Aid and Other Resource Transfers on Savings and Growth in Less-Developed Countries: A Comment," Economic Journal, Royal Economic Society, vol. 83(331), pages 867-69, September.
  35. Griffin, Keith, 1973. "The Effect of Aid and Other Resource Transfers on Savings and Growth in Less-Developed Countries: A Comment," Economic Journal, Royal Economic Society, vol. 83(331), pages 863-66, September.
  36. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
  37. Heller, Peter S, 1975. "A Model of Public Fiscal Behavior in Developing Countries: Aid, Investment, and Taxation," American Economic Review, American Economic Association, vol. 65(3), pages 429-45, June.
  38. repec:imf:imfpdp:9801 is not listed on IDEAS
  39. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
  40. Griffin, Keith B & Enos, J L, 1970. "Foreign Assistance: Objectives and Consequences," Economic Development and Cultural Change, University of Chicago Press, vol. 18(3), pages 313-27, April.
  41. Areskoug, Kaj, 1973. "Foreign-Capital Utilization and Economic Policies in Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 55(2), pages 182-89, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:12:y:2000:i:3:p:375-398. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.