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The aid effectiveness literature: The sad results of 40 years of research

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  • Doucouliagos , H.
  • Paldam, M.

Abstract

The aid effectiveness literature (AEL) consists of empirical macro studies of the effects of development aid. By the end of 2004, it had reached 97 econometric studies of three families, which have been analyzed in one study for each family using meta-analysis. The AEL is an ideal subject for meta-analysis as it uses only a few formally similar models which try to catch precisely the same effects. Also, it is an area with strong beliefs – often generated by altruism – and interests. In this survey of the AEL, we shows that when the whole of the literature is examined, a clear pattern emerges in the results: after 40 years of development aid, the evidence indicates that aid has not been effective. We show that the distribution of results is significantly asymmetrical in a way that reflects the reluctance of the research community to publish negative results. The Dutch Disease effect of aid has been ignored but is a plausible explanation for aid ineffectiveness.

Suggested Citation

  • Doucouliagos , H. & Paldam, M., 2007. "The aid effectiveness literature: The sad results of 40 years of research," Cambridge Working Papers in Economics 0773, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0773
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    1. Weisskopf, Thomas E, 1972. "An Econometric Test of Alternative Constraints on the Growth of Underdeveloped Countries," The Review of Economics and Statistics, MIT Press, vol. 54(1), pages 67-78, February.
    2. Francesco Busato & Bruno Chiarini & Enrico Marchetti, 2005. "Fiscal Policy under Indeterminacy and Tax Evasion," Economics Working Papers 2005-09, Department of Economics and Business Economics, Aarhus University.
    3. Haldrup, Niels & Hylleberg, Svend & Pons, Gabriel & Sanso, Andreu, 2007. "Common Periodic Correlation Features and the Interaction of Stocks and Flows in Daily Airport Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 21-32, January.
    4. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, Department of Economics and Business Economics, Aarhus University.
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    More about this item

    Keywords

    Aid effectiveness; meta study; accumulation; growth.;
    All these keywords.

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F35 - International Economics - - International Finance - - - Foreign Aid

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