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The Macroeconomic Effects of Foreign Aid: A Survey

  • Philipp Harms

    ()

  • Matthias Lutz

    ()

Research on the macroeconomic effects of aid has expanded rapidly in recent years. In this paper, we provide a survey of this literature. We start by reviewing some theoretical models that suggest a positive impact of aid on investment and growth. We then discuss the empirical evidence, giving particular attention to the role of institutions and policies in determining aid effectiveness. As a general conclusion, we suggest adopting a more disaggregate perspective with respect both to different types of aid and to various aspects of governance.

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File URL: http://www1.vwa.unisg.ch/RePEc/usg/dp2004/dp11_har.pdf
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Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2004 with number 2004-11.

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Length: 26 pages
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:usg:dp2004:2004-11
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