Aid and Income: Another Time-Series Perspective

Matthijs Lof, Tseday Jemaneh Mekasha and Finn Tarp

No wp-2013-069, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: In a recent article, Nowak-Lehmann, Dreher, Herzer, Klasen, and Martínez-Zarzoso (2012) (henceforth NDHKM) conclude that foreign aid has not had a significant effect on income, based on evidence from panel data potentially covering 131 countries over the period 1960-2006. The present study provides a replication of the empirical results reported by NDHKM. We uncover that NDHKM relied on a regression model that included a log transformation of variables that are not strictly positive. This led to a non-random omission of a large proportion of observations.

Keywords: Economic assistance and foreign aid; Econometric models (Economic development) (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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Journal Article: Aid and Income: Another Time-series Perspective (2015)
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