On Aid, Growth and Good Policies

Carl-Johan Dalgaard and Henrik Hansen

Journal of Development Studies, 2001, vol. 37, issue 6, 17-41

Abstract: This study provides a critical analysis of the growth regressions in Burnside and Dollar [2000]. First, we analyse the relationship between aid and government expenditure in a modified neo-classical growth model. One of the main results of the analysis is that while good policies spur growths they may at the same time reduce the effectiveness of foreign aid. Second, we show that the econometric results in Burnside and Dollar emphasising the crucial role of interaction between aid and good policies in the growth process are fragile, as they are extremely data dependent. Finally, we demonstrate that the Burnside and Dollar data lend support to the idea that the association between aid and growth can be approximated by decreasing returns to aid. This finding conforms well to regression results in other recent studies.

Keywords: Growth Regressions; Aid; Government Expenditure; Good Policies; Burnside and Dollar; Aid Effectiveness (search for similar items in EconPapers)
Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (234)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/713601081 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jdevst:v:37:y:2001:i:6:p:17-41

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/713601081

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().