Aid Effectiveness in Sustainable Development: A Multidimensional Approach

66 Pages Posted: 25 May 2022 Last revised: 1 Sep 2022

See all articles by Omar A Guerrero

Omar A Guerrero

The Alan Turing Institute

Daniele Guariso

The Alan Turing Institute

Gonzalo Castañeda Ramos

University of the Americas, Puebla - Department of Economics

Date Written: May 5, 2022

Abstract

What is the impact of international aid? We answer this question by linking disaggregated aid-flows data to a large set of indicators classified into the Sustainable Development Goals (SDGs). Since such linkage is not perfect (due to the nature of the data), we deploy an artificial intelligence model of the causal process through which changes in aid flows contribute to the dynamics of individual indicators. The model accounts for salient features of real-world development such as multidimensionality, complex interconnections between indicators, heterogeneous aid-to-expenditure ratios, rationally-bounded bureaucracies, fungibility, and the temporal structure of contemporary aid flows across development dimensions. The model does not require cross-country pooled data, so we calibrate its parameters for each of the 146 aid-recipient countries in our sample, preserving important contextual information of each nation. By producing counterfactual simulations where aid is removed, we obtain nuanced estimates of the impact of international assistance during the first decade of the 21st century, at the level of each country, SDG, and indicator. We validate our results using a sector-specific study with similar–but more aggregate–findings. Such a large and detailed picture of the multidimensional impact of aid has not been documented before.

Keywords: aid, effectiveness, development, agent computing, impact, SDGs, AI, agent-based model

Suggested Citation

Guerrero, Omar A and Guariso, Daniele and Castañeda Ramos, Gonzalo, Aid Effectiveness in Sustainable Development: A Multidimensional Approach (May 5, 2022). Available at SSRN: https://ssrn.com/abstract=4101378 or http://dx.doi.org/10.2139/ssrn.4101378

Omar A Guerrero (Contact Author)

The Alan Turing Institute ( email )

96 Euston Road
London, NW1 2DB
United Kingdom

Daniele Guariso

The Alan Turing Institute ( email )

British Library
96 Euston Road
London, NW1 2DB
United Kingdom

Gonzalo Castañeda Ramos

University of the Americas, Puebla - Department of Economics ( email )

Sta. Catarina Martir
Cholula, Puebla 72820 72810
Mexico

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