Aid, Growth, and Development Have We Come Full Circle?
The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program evaluation literature, we re-examine key hypotheses. In our findings, aid has a positive and statistically significant causal effect on growth over the long run, with confidence intervals conforming to levels suggested by growth theory. Aid remains a key tool for enhancing the development prospects of poor countries.
|Date of creation:||2010|
|Date of revision:|
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- Berthelemy, Jean-Claude & Tichit, Ariane, 2004.
"Bilateral donors' aid allocation decisions--a three-dimensional panel analysis,"
International Review of Economics & Finance,
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- Enrique Moral-Benito, 2012.
"Determinants of Economic Growth: A Bayesian Panel Data Approach,"
The Review of Economics and Statistics,
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- Moral-Benito, Enrique, 2009. "Determinants of Economic Growth: A Bayesian Panel Data Approach," Policy Research Working Paper Series 4830, The World Bank.
- Enrique Moral-Benito, 2007. "Determinants Of Economic Growth: A Bayesian Panel Data Approach," Working Papers wp2007_0719, CEMFI.
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