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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.

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

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

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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

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