Is aid the capital component making countries efficient?

Ann Veiderpass () and Per-Åke Andersson ()
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Ann Veiderpass: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Per-Åke Andersson: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG

No 333, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: Cross country regressions on aid effectiveness have failed to provide substantial evidence on the effects of foreign aid. This study focuses on country performance in a production theory context. By means of the non-parametric DEA method, we study 60 individual low and middle income countries between 1995 and 2000. Is there a systematic correlation between resource intensity and country efficiency? We find indications of a positive relation between capital intensity and country efficiency. We then investigate whether aid is the conclusive part of capital providing this correlation, but when linking country efficiency development to aid, there is no clear pattern to be found.

Keywords: Aid; efficiency; country comparison; production approach (search for similar items in EconPapers)
JEL-codes: D24 O57 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2009-01-12
New Economics Papers: this item is included in nep-afr, nep-ara, nep-dev and nep-eff
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