Assessing Foreign Aid's Long Run Contribution to Growth and Development

World Development 01/2014; DOI: 10.1016/j.worlddev.2013.12.016

Posted: 25 Nov 2014

See all articles by Channing Arndt

Channing Arndt

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Finn Tarp

University of Copenhagen - Department of Economics

Sam Jones

University of Copenhagen - Department of Economics

Date Written: January 2014

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 40 years stimulated growth, promoted structural change, improved social indicators, and reduced poverty.

Suggested Citation

Arndt, Channing and Tarp, Finn and Jones, Sam, Assessing Foreign Aid's Long Run Contribution to Growth and Development (January 2014). World Development 01/2014; DOI: 10.1016/j.worlddev.2013.12.016 , Available at SSRN: https://ssrn.com/abstract=2530176

Channing Arndt (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6 B
Helsinki, FI‐00160
Finland

Finn Tarp

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Sam Jones

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

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