What is the Aggregate Economic Rate of Return to Foreign Aid?

Channing Arndt, Sam Jones and Finn Tarp

No wp-2014-089, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Does foreign aid promote aggregate economic growth? In contrast to widespread perceptions, academic studies of this question have been rapidly converging towards a positive answer. We employ a simulation approach to (i) validate the coherence of recent empirics and (ii) calculate plausible ranges for the rate of return to aid. Our results highlight the long-run nature of aid investments and indicate the return to aid falls in ranges commonly accepted for public investments. We find no basis for the view that aid has a pernicious effect on productivity.

Keywords: Economic assistance and foreign aid; Economic development; Simulation methods (Economics); Rate of return (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Journal Article: What Is the Aggregate Economic Rate of Return to Foreign Aid? (2016)
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