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The Impact of Aid on Growth Revisited: Do Donor Motives Matter?

  • Christopher Kilby

    ()

    (Department of Economics, Villanova University, Villanova, PA USA)

  • Axel Dreher

    ()

    (University of Goettingen, Goettingen Germany)

The typical identification strategy in aid effectiveness studies assumes donor motives do not influence the impact of aid on growth. We call this homogeneity assumption into question, first constructing a model in which donor motives matter and then testing the assumption empirically.

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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 09-225.

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Length: 28 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:kof:wpskof:09-225
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  1. Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October.
  2. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  3. Peter Boone, 1995. "Politics and the Effectiveness of Foreign Aid," NBER Working Papers 5308, National Bureau of Economic Research, Inc.
  4. Minoiu, Camelia & Reddy, Sanjay G., 2010. "Development aid and economic growth: A positive long-run relation," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(1), pages 27-39, February.
  5. Matteo Bobba & Andrew Powell, 2007. "Aid Effectiveness: Politics Matters," IDB Publications (Working Papers) 6725, Inter-American Development Bank.
  6. Peter Jensen & Martin Paldam, 2006. "Can the two new aid-growth models be replicated?," Public Choice, Springer, vol. 127(1), pages 147-175, April.
  7. Hristos Doucouliagos & Martin Paldam, 2009. "The Aid Effectiveness Literature: The Sad Results Of 40 Years Of Research," Journal of Economic Surveys, Wiley Blackwell, vol. 23(3), pages 433-461, 07.
  8. Peter Boone, 1995. "Politics and the Effectiveness of Foreign Aid," CEP Discussion Papers dp0272, Centre for Economic Performance, LSE.
  9. Judson, Ruth A. & Owen, Ann L., 1999. "Estimating dynamic panel data models: a guide for macroeconomists," Economics Letters, Elsevier, vol. 65(1), pages 9-15, October.
  10. Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
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