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Assessing Foreign Aid's Long-Run Contribution to Growth in Development

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  • Arndt, Channing
  • Jones, Sam
  • Tarp, Finn

Abstract

This paper confirms recent evidence of a positive impact of aid on growth and widens the scope of evaluation to a range of outcomes including proximate sources of growth (e.g., physical and human capital), indicators of social welfare (e.g., poverty and infant mortality), and measures of economic transformation (e.g., share of agriculture and industry in value added). Focusing on long-run cumulative effects of aid in developing countries, and taking due account of potential endogeneity, a coherent and favorable pattern of results emerges. Aid has over the past forty years stimulated growth, promoted structural change, improved social indicators and reduced poverty.

Suggested Citation

  • Arndt, Channing & Jones, Sam & Tarp, Finn, 2013. "Assessing Foreign Aid's Long-Run Contribution to Growth in Development," WIDER Working Paper Series 072, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2013-072
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gopalan, Sasidaran & Rajan, Ramkishen S., 2016. "Has Foreign Aid Been Effective in the Water Supply and Sanitation Sector? Evidence from Panel Data," World Development, Elsevier, vol. 85(C), pages 84-104.
    2. Huang, Yongfu & Quibria, M. G., 2013. "The Global Partnership for Inclusive Growth," WIDER Working Paper Series 059, World Institute for Development Economic Research (UNU-WIDER).
    3. Jones, Sam & Tarp, Finn, 2016. "Does foreign aid harm political institutions?," Journal of Development Economics, Elsevier, vol. 118(C), pages 266-281.
    4. Donaubauer, Julian & Meyer, Birgit & Nunnenkamp, Peter, 2016. "Aid, Infrastructure, and FDI: Assessing the Transmission Channel with a New Index of Infrastructure," World Development, Elsevier, vol. 78(C), pages 230-245.
    5. Tony Addison & Finn Tarp, 2015. "Lessons for Japanese foreign aid from research on aid's impact," WIDER Working Paper Series 056, World Institute for Development Economic Research (UNU-WIDER).
    6. Carter, Patrick, 2017. "Aid econometrics: Lessons from a stochastic growth model," Journal of International Money and Finance, Elsevier, vol. 77(C), pages 216-232.
    7. repec:zbw:rwimat:085 is not listed on IDEAS
    8. Łukasz Marć, 2017. "The Impact of Aid on Total Government Expenditures: New Evidence on Fungibility," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 627-663, August.
    9. Arndt, Channing & Jones, Sam & Tarp, Finn, 2015. "Assessing Foreign Aid’s Long-Run Contribution to Growth and Development," World Development, Elsevier, vol. 69(C), pages 6-18.
    10. repec:unu:wpaper:wp2015-58 is not listed on IDEAS
    11. Azam, Jean-Paul & Thelen, Véronique, 2014. "Did the Aid Boom Pacify Sub-Saharan Africa?: Ex-Post Evaluation Using a Near-Identification Approach," TSE Working Papers 14-544, Toulouse School of Economics (TSE), revised May 2017.
    12. Feeny, Simon & Vuong, Vu, 2017. "Explaining Aid Project and Program Success: Findings from Asian Development Bank Interventions," World Development, Elsevier, vol. 90(C), pages 329-343.
    13. Maria Rosaria Carillo & Valentina Chiariello & Rita De Siano, 2016. "Women in Parliaments and Aid effectiveness in Sub-Saharan African countries," Discussion Papers 5_2016, CRISEI, University of Naples "Parthenope", Italy.
    14. Jörg Peters, 2015. "Diskussionspapier: Von Staaten, Märkten und Subventionen – Paradigmenwechsel in der Armutsbekämpfung?," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 13, 04.
    15. Carter Patrick, 2013. "Does Foreign Aid Displace Domestic Taxation?," Journal of Globalization and Development, De Gruyter, vol. 4(1), pages 1-47, August.
    16. Addison, Tony & Singhal, Saurabh & Tarp, Finn, 2013. "Aid to Africa: The Changing Context," WIDER Working Paper Series 144, World Institute for Development Economic Research (UNU-WIDER).
    17. Azam, Jean-Paul, 2016. "Near identification of policy trade-offs using preference proxies to elicit hidden information in the linear case," TSE Working Papers 16-642, Toulouse School of Economics (TSE).
    18. Peters, Jörg, 2014. "Von Staaten, Märkten und Subventionen: Paradigmenwechsel in der Armutsbekämpfung?," RWI Materialien 85, RWI - Leibniz-Institut für Wirtschaftsforschung.

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    Keywords

    Capital; Economic assistance and foreign aid; Econometric models (Economic development); Poverty;

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