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Aid Proliferation and Economic Growth: A Cross-Country Analysis

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  • KIMURA Hidemi
  • SAWADA Yasuyuki
  • MORI Yuko

Abstract

In this paper, we examine whether aid proliferation hinders aid effectiveness in promoting economic growth. We employ a wide variety of specifications of the standard aid-growth regression using Roodman's (2007a) dataset. Specifically, we include a donor-concentration index as a proxy for donor proliferation and the interaction term between aid and a donor-concentration index as additional independent variables. Our best empirical results are in favor of a hypothesis that aid proliferation involves a negative effect on economic growth of the recipient countries with proper correction for possible biases arising from omitted variable and endogeneity problems.

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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 07044.

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Length: 40 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:eti:dpaper:07044
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Cited by:

  1. Christopher Kilby, 2010. "What Determines the Size of Aid Projects?," Villanova School of Business Department of Economics and Statistics Working Paper Series 10, Villanova School of Business Department of Economics and Statistics.
  2. Christopher Selvarajah, 2014. "Foreign aid imperatives in the Greater Mekong Subregion: case studies of Australian, Japanese and Thai Aid Coordination," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 21(1), pages 23-65, June.
  3. Anderson, Edward, 2012. "Aid fragmentation and donor transaction costs," Economics Letters, Elsevier, vol. 117(3), pages 799-802.
  4. Eric Gabin Kilama, 2014. "Recipients aid absorption in the new development cooperation landscape," Economics Bulletin, AccessEcon, vol. 34(3), pages 1929-1944.
  5. KIMURA Hidemi & SAWADA Yasuyuki & MORI Yuko, 2007. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," Discussion papers 07044, Research Institute of Economy, Trade and Industry (RIETI).
  6. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Documents de travail du Centre d'Economie de la Sorbonne 13046, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  7. Larrú, José María, 2013. "The developmental contribution of the Offset Agreements: the case of Colombia," MPRA Paper 51456, University Library of Munich, Germany.
  8. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00825816, HAL.
  9. Lee, Suejin A. & Lim, Jae-Young, 2014. "Does International Health Aid Follow Recipients’ Needs? Extensive and Intensive Margins of Health Aid Allocation," World Development, Elsevier, vol. 64(C), pages 104-120.
  10. Knack, Stephen & Smets, Lodewijk, 2013. "Aid Tying and Donor Fragmentation," World Development, Elsevier, vol. 44(C), pages 63-76.
  11. Rahman, Aminur & Sawada, Yasuyuki, 2012. "Can donor coordination solve the aid proliferation problem?," Economics Letters, Elsevier, vol. 116(3), pages 609-612.

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