The Aid Effectiveness Literature - The Sad Result of 40 Years of Research
Aarhus University Economics Paper No. 2005-15
29 Pages Posted: 19 Jun 2008
Date Written: July 21, 2005
Abstract
The AEL consists of empirical macro studies of the effects of development aid. At the end of 2004 it had reached 97 studies of three families, which we have summarized in one study each using meta-analysis. Studies of the effect on investments show that they rise by 1/3 of the aid - the rest is crowded out by a fall in savings. Studies of the effect on growth show an insignificant positive effect. Studies of the effect on growth, conditional on something else, have till now shown weak results. The Dutch Disease effect of aid has been ignored. The best aggregate estimate is that since its start in the early 1960s aid has increased the standard of living in the poor countries by 20%.
Keywords: Aid effectiveness, meta study, accumulation, growth
JEL Classification: B2, E21, E22, F35, O35
Suggested Citation: Suggested Citation
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