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La relación entre la ayuda al desarrollo y la desigualdad. Evidencia y justificación teórica
[Aid and inequality relationship. Evidence and theoretical justification]

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  • JOSÉ MARÍA, LARRÚ

Abstract

Whilst the aid-growth relationship has been deeply studied, the relation between aid and inequality has not. The paper finds a negative robust correlation between changes in inequality and foreign aid in a cross-section analysis for 77 countries and the period 1990-2000. This correlation is analyzed in a growth-poverty-inequality-institutional framework. The outliers are studied deeper instead of average results. In a second step, the aid-inequality relationship is theoretically justified over six dimensions: potential production, production factors, incentives structure, economic policy, public resources allocation and the autoregressive nature of aid and inequality. The final section considers positive and normative consequences of the aid-inequality relationship on the recipient (countries and people) selection of foreign aid.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38857.

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Date of creation: 18 May 2012
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Handle: RePEc:pra:mprapa:38857
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Keywords: inequality; foreign aid; selection bias;

Find related papers by JEL classification:

  • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
  • F35 - International Economics - - International Finance - - - Foreign Aid

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