Help or Hindrance? U.S. Aid on Growth
13 Pages Posted: 16 Mar 2017
Date Written: March 14, 2017
We distinguish between U.S. aid and non-U.S. aid and study the effects on growth in recipient countries. Our analysis exploits time variation in aid due to changes in the supply of U.S. aid and cross-sectional variation in a country's tendency to receive any U.S. aid. We find that U.S. aid has a positive effect on growth. In particular, U.S. economic aid has a positive effect on growth while U.S. military and food aid have no effect on growth. There is also no evidence of U.S. aid crowding out aid from other countries.
Keywords: U.S. aid, growth
JEL Classification: O10, O40
Suggested Citation: Suggested Citation