Does Aid for Education Educate Children? Evidence from Panel Data

KOF Working Paper / KOF Swiss Economic Institute, ETH Zurich No. 146

42 Pages Posted: 6 Dec 2006

See all articles by Axel Dreher

Axel Dreher

Heidelberg University

Peter Nunnenkamp

University of Kiel

Rainer Thiele

Kiel Institute for the World Economy

Multiple version iconThere are 2 versions of this paper

Date Written: August 2006

Abstract

This paper empirically analyzes the impact of aid on education for about 100 countries over the period 1970-2005. We estimate a system of equations to test whether and to what extent the impact of sector-specific aid on educational attainment depends on (i) the extent to which aid adds to overall educational expenditure of the recipient government, (ii) the strength of the link between government expenditure and education, (iii) the quality of institutions in the recipient country, and (iv) whether aid encourages institutional reforms. According to our results, aid significantly increases primary school enrolment. This result is robust to the method of estimation, employing instruments to control for the endogeneity of aid, and the measure of institutional quality employed. The degree of institutional quality, however, has no robust impact on this relationship.

Keywords: Aid effectiveness, Education, Sector-specific aid

JEL Classification: F35, O11, H52, I22

Suggested Citation

Dreher, Axel and Nunnenkamp, Peter and Thiele, Rainer, Does Aid for Education Educate Children? Evidence from Panel Data (August 2006). KOF Working Paper / KOF Swiss Economic Institute, ETH Zurich No. 146. Available at SSRN: https://ssrn.com/abstract=949193 or http://dx.doi.org/10.2139/ssrn.949193

Axel Dreher (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

Rainer Thiele

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany
+49 431 8814 215 (Phone)
+49 431 8814 500 (Fax)

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