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Aid Effectiveness Disputed

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  • Hansen, Henrik
  • Tarp, Finn

Abstract

There is a widespread perception among academic researchers and aid practitioners alike that empirical cross-country analysis fails to find any significant link between aid flows and growth, and that aid is successful only when associated with good policies in the recipient countries. These positions do not stand up to careful scrutiny of existing studies. In this paper, we offer a re-examination of the literature on the aid-savings, aid-investment, and aid growth relationships, and a comparative appraisal of more recent research contributions. Using an analytic framework for evaluating the empirical work, a coherent and positive picture of the aid-growth link emerges. Aid works, even in countries hampered by an unfavorable policy environment.

Suggested Citation

  • Hansen, Henrik & Tarp, Finn, 1999. "Aid Effectiveness Disputed," MPRA Paper 62290, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:62290
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    References listed on IDEAS

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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