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Types of Foreign Aid

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  • Christian Bjørnskov

    () (Department of Economics and Business, Aarhus University)

Abstract

Foreign aid is given for many purposes and different intentions, yet most studies treat aid flows as a unitary concept. This paper uses factor analysis to separate aid flows into different types. The main types can be interpreted as aid for economic purposes, social purposes, and reconstruction; a residual category captures remaining purposes. Estimating the growth effects of separable types of aid suggests that most aid has no effects while reconstruction aid has direct positive effects. Although this type only applies in special circumstances, it has become more prevalent in more recent years.

Suggested Citation

  • Christian Bjørnskov, 2013. "Types of Foreign Aid," Economics Working Papers 2013-08, Department of Economics and Business Economics, Aarhus University.
  • Handle: RePEc:aah:aarhec:2013-08
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    File URL: ftp://ftp.econ.au.dk/afn/wp/13/wp13_08.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Axel Dreher & Sarah Langlotz, 2015. "Aid and Growth. New Evidence Using an Excludable Instrument," CESifo Working Paper Series 5515, CESifo Group Munich.
    2. Young, Andrew T. & Sheehan, Kathleen M., 2014. "Foreign aid, institutional quality, and growth," European Journal of Political Economy, Elsevier, vol. 36(C), pages 195-208.
    3. Axel Dreher & Vera Eichenauer & Kai Gehring, 2013. "Geopolitics, Aid and Growth," CESifo Working Paper Series 4299, CESifo Group Munich.
    4. Fuchs, Andreas & Richert, Katharina, 2015. "Do Development Minister Characteristics Affect Aid Giving?," Working Papers 0604, University of Heidelberg, Department of Economics.
    5. Kai Gehring & Katharina Michaelowa & Axel Dreher & Franziska Spörri, 2015. "Do we know what we think we know? Aid fragmentation and effectiveness revisited," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 185, Courant Research Centre PEG.
    6. Dreher, Axel & Minasyan, Anna & Nunnenkamp, Peter, 2015. "Government ideology in donor and recipient countries: Does ideological proximity matter for the effectiveness of aid?," European Economic Review, Elsevier, vol. 79(C), pages 80-92.

    More about this item

    Keywords

    Foreign aid; dimensionality; development; economic growth;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F35 - International Economics - - International Finance - - - Foreign Aid

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