Does Foreign Aid Reduce Poverty?: Empirical Evidence from Nongovernmental and Bilateral Aid

32 Pages Posted: 3 Mar 2006

See all articles by Nadia Masud

Nadia Masud

affiliation not provided to SSRN

Boriana Yontcheva

International Monetary Fund (IMF) - IMF Institute

Date Written: May 2005

Abstract

This paper assesses the effectiveness of foreign aid in reducing poverty through its impact on human development indicators. We use a dataset of both bilateral aid and NGO aid flows. Our results show that NGO aid reduces infant mortality and does so more effectively than official bilateral aid. The impact on illiteracy is less significant. We also test whether foreign aid reduces government efforts in achieving developmental goals and find mixed evidence of a substitution effect.

Keywords: Official Development Aid, NGOs, Panel Data Econometrics

JEL Classification: C25, F35

Suggested Citation

Masud, Nadia and Yontcheva, Boriana, Does Foreign Aid Reduce Poverty?: Empirical Evidence from Nongovernmental and Bilateral Aid (May 2005). IMF Working Paper, Vol. , pp. 1-32, 2005. Available at SSRN: https://ssrn.com/abstract=887969

Nadia Masud (Contact Author)

affiliation not provided to SSRN

No Address Available

Boriana Yontcheva

International Monetary Fund (IMF) - IMF Institute ( email )

700 19 th Street NW
Washington, DC 20431
United States

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