The Impact of Foreign Aid on Aggregate Welfare Measures: A Panel Data Analysis

26 Pages Posted: 5 Dec 2018

See all articles by José Alves

José Alves

Technical University of Lisbon (UTL) - Department of Economics; UECE - Research Unit on Complexity in Economics

Cláudia Couto

University of Nottingham

Date Written: November 10, 2018

Abstract

Does foreign aid enhance aggregate human welfare? This paper attempts to answer this question by using a panel of twenty-eight countries, covering the period from 1990 to 2014. It explores intra country variation by splitting the sample into low-income and middle-income countries. Combined with the fixed effects estimator, these approaches sought to control for the heterogeneity of the effects of aid on welfare measures. Perhaps surprisingly, there was no evidence that foreign aid contributes to the reduction of infant mortality or increase of human development index.

Keywords: Foreign Aid, Aggregate Human Welfare, Low-Middle Income Countries

JEL Classification: C23, F35, F63, P33

Suggested Citation

Alves, José and Alves, José and Couto, Cláudia, The Impact of Foreign Aid on Aggregate Welfare Measures: A Panel Data Analysis (November 10, 2018). Available at SSRN: https://ssrn.com/abstract=3282285 or http://dx.doi.org/10.2139/ssrn.3282285

José Alves (Contact Author)

Technical University of Lisbon (UTL) - Department of Economics ( email )

R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal

UECE - Research Unit on Complexity in Economics ( email )

ISEG/UTL, Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

Cláudia Couto

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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