Download This PaperDoes Foreign Aid Help?
28 Pages Posted: 18 Apr 2006
Date Written: March 2006
Abstract
Recently, Sachs et al. (2004) have argued in favor of a massive increase in foreign aid to Africa in order to escape from a poverty trap. They propose to increase the capital stock in one step, through a large, well-targeted infusion of foreign assistance. In this article we show that foreign aid has a negative impact on the democratic stance of developing countries, and on economic growth by reducing investment and increasing government consumption. Therefore, our empirical findings do not support the Sachs proposal.
Keywords: Foreign aid, development
JEL Classification: O10, O19
Suggested Citation: Suggested Citation
Peterson Institute for International Economics ( email )
1750 Massachusetts Avenue, NW
Washington, DC 20036
United States
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
By A. Craig Burnside and David Dollar
-
Aid, Policies, and Growth: Revisiting the Evidence
By A. Craig Burnside and David Dollar
-
Who Gives Foreign Aid to Whom and Why?
By Alberto F. Alesina and David Dollar
-
Aid Allocation and Poverty Reduction
By David Dollar and Paul Collier
-
Aid and Growth: What Does the Cross-Country Evidence Really Show?
-
Aid and Growth: What Does the Cross-Country Evidence Really Show?
-
New Data, New Doubts: Revisiting 'Aid, Policies, and Growth'
By William Easterly, Ross Levine, ...
-
New Data, New Doubts: A Comment on Burnside and Dollar's "Aid, Policies, and Growth" (2000)
By William Easterly, Ross Levine, ...