Does Development Aid Help Poor Countries Catch Up?
Aarhus University Economics Paper No. 2005-16
29 Pages Posted: 18 Jun 2008
Date Written: August 16, 2005
Abstract
Aid flows are included into the standard cross-country catch-up relation. Robustness of the result is tested by changing time periods and by adding extra variables. The main results are: Absolute convergence and absolute aid effectiveness are both rejected. While conditional convergence is accepted, conditional aid effectiveness is found to be weak. The two relations are largely independent. However, aid has a clear activity effect in the short run. Finally, we try to divide the countries into an A-group where aid is effective and a B-group where it harms. Several criteria of division were explored, but none were very successful - the most satisfactory is the one that divides countries according to their level of development.
Keywords: Convergence, growth, development aid effectiveness
JEL Classification: C14, C23, F35, O4
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By A. Craig Burnside and David Dollar
-
Aid, Policies, and Growth: Revisiting the Evidence
By A. Craig Burnside and David Dollar
-
Who Gives Foreign Aid to Whom and Why?
By Alberto F. Alesina and David Dollar
-
Aid Allocation and Poverty Reduction
By David Dollar and Paul Collier
-
Aid and Growth: What Does the Cross-Country Evidence Really Show?
-
Aid and Growth: What Does the Cross-Country Evidence Really Show?
-
New Data, New Doubts: Revisiting 'Aid, Policies, and Growth'
By William Easterly, Ross Levine, ...
-
New Data, New Doubts: A Comment on Burnside and Dollar's "Aid, Policies, and Growth" (2000)
By William Easterly, Ross Levine, ...