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The Role of Foreign Aid and Foreign Direct Investment in Reducing Poverty

Author

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  • El Mechry, El Koudouss
  • Van der Sluis, Evert

Abstract

We examine the role of foreign aid and foreign direct investment (FDI) in reducing poverty in less developed countries (LDCs). Using panel data, our analyses suggest the effectiveness of foreign aid in reducing poverty depends on the measure of aid, the type of data analyzed, and the method of analysis employed. Overall, our findings suggest that FDI is largely ineffective in reducing poverty, and that U.S. agricultural aid has a small but significantly negative effect on reducing poverty in LDCs.

Suggested Citation

  • El Mechry, El Koudouss & Van der Sluis, Evert, 2015. "The Role of Foreign Aid and Foreign Direct Investment in Reducing Poverty," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 206193, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:206193
    DOI: 10.22004/ag.econ.206193
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