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Conditional Aid Effectiveness. A Meta Study

Author

Listed:
  • Hristos Doucouliagos
  • Martin Paldam

    (Department of Economics, University of Aarhus, Denmark)

Abstract

The AEL (aid effectiveness literature) studies the effect of development aid using econome¬ trics on macro data. It contains about 100 papers of which a third analyzes conditional models where aid effectiveness depends upon z, so that aid only works for a certain range of the variable. The key term in this family of AEL models is thus an interaction term of z times aid. The leading candidates for z are a good policy index and aid itself. In this paper, meta- analysis techniques are used (i) to determine whether the AEL has established the said interaction terms, and (ii) to identify some of the determinants of the differences in results between studies. Taking all available studies in consideration, we find no support for conditionality with respect to policy, while conditionality regarding aid itself is dubious. However, the results differ depending on the authors’ institutional affiliation.

Suggested Citation

  • Hristos Doucouliagos & Martin Paldam, 2005. "Conditional Aid Effectiveness. A Meta Study," Economics Working Papers 2005-14, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2005-14
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    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • F35 - International Economics - - International Finance - - - Foreign Aid

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