Aid, Economic Freedom, and Growth

Contemporary Economic Policy, Vol. 27, No. 1, pp. 46-53, January 2009

8 Pages Posted: 26 Jan 2009

See all articles by Jac C. Heckelman

Jac C. Heckelman

Wake Forest University - Department of Economics

Stephen Knack

World Bank - Development Research Group (DECRG)

Abstract

Foreign aid has often been intended by donors to entice recipient nations into policy and institutional reforms favorable to private sector economic development. In this study, we investigate the relationship between aid and changes to economic freedom in recipient nations over the 1990-2000 decade. The evidence is mixed. In general, we find that foreign aid has no significant effect on economic freedom overall. However, using a hedonic approach on the different categories of economic freedom, we find that aid has still managed to contribute toward a policy and institutional environment favorable to growth, as the different categories of economic freedom improved by aid more than offset those which are harmed by aid, in terms of their impact on growth.

JEL Classification: 010, 019

Suggested Citation

Heckelman, Jac C. and Knack, Stephen, Aid, Economic Freedom, and Growth. Contemporary Economic Policy, Vol. 27, No. 1, pp. 46-53, January 2009, Available at SSRN: https://ssrn.com/abstract=1331656 or http://dx.doi.org/10.1111/j.1465-7287.2008.00123.x

Jac C. Heckelman (Contact Author)

Wake Forest University - Department of Economics ( email )

P.O. Box 7505
Winston-Salem, NC 27109
United States
(336) 758-5923 (Phone)
(336) 758-6028 (Fax)

HOME PAGE: http://www.wfu.edu/~heckeljc/jac.htm

Stephen Knack

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-9712 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/sknack

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
3
Abstract Views
464
PlumX Metrics