The Impact of Aid on Growth an aid disaggregation approach

Konferenzbeitrag

This paper investigates the impact of aid on growth. A clear departure from the vast majority of the existing literature is that we a disaggregate aid by functional classification. Using the GMM SYS approach to dynamic panel estimator we test the three main competing specifications in the aid and growth literature for a sample of aid recipient countries over the 1974-2001 period. Our results clearly show that the different categories of aid exert different effects on growth. Indeed, we find that project aid exerts a positive and significant impact on growth whilst financial programme aid generally impacts on growth negatively. Our results also show that the impact of non-financial aid, technical assistance grants and food aid, is statistically insignificant. We found, however, no evidence to suggest that policy enhances the growth effect of the aid categories. Our non-linearity tests suggest that only project aid is associated with diminishing returns. Finally, our results confirm the finding that climate related conditions affect the working of aid (project).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Proceedings of the German Development Economics Conference, Zürich 2008 ; No. 31

Classification and Topics

• Classification: Wirtschaft
• Subject: Aid ; Growth ; Dynamic Panel Methods

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ouattara, Bazoumana ; Strobl, Eric
• Event: Veröffentlichung
• (who): Verein für Socialpolitik, Ausschuss für Entwicklungsländer
• (where): Göttingen
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/39902
• Last update: 10.03.2025, 11:42 AM CET