Types of Foreign Aid

41 Pages Posted: 23 Aug 2012 Last revised: 23 Jan 2014

See all articles by Christian Bjørnskov

Christian Bjørnskov

Aarhus University - Department of Economics and Business; Research Institute of Industrial Economics (IFN); Center for Political Studies; Institute for Corruption Studies

Date Written: January 23, 2014

Abstract

Foreign aid is given for many purposes and different intentions, yet most studies treat aid flows as a unitary concept. This paper uses factor analysis to separate aid flows into different types. The main types can be interpreted as aid for economic purposes, social purposes, and reconstruction; a residual category captures remaining purposes. Estimating the growth effects of separable types of aid suggests that most aid has no effects while reconstruction aid has direct positive effects. Although this type only applies in special circumstances, it has become more prevalent in more recent years.

Keywords: foreign aid, dimensionality, development, economic growth

JEL Classification: O11, F35

Suggested Citation

Bjørnskov, Christian, Types of Foreign Aid (January 23, 2014). Available at SSRN: https://ssrn.com/abstract=2134772 or http://dx.doi.org/10.2139/ssrn.2134772

Christian Bjørnskov (Contact Author)

Aarhus University - Department of Economics and Business ( email )

Fuglesangs Allé 4
Aarhus V, DK-8210
Denmark

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Center for Political Studies

Landgreven 3
Copenhagen K, DK-1301
Denmark

Institute for Corruption Studies

Stevenson Hall 425
Normal, IL 61790-4200
United States

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