 The Impact of Aid on Growth an aid disaggregation approachBazoumana Ouattara and Eric Strobl () No 31, Proceedings of the German Development Economics Conference, Zurich 2008 from Verein für Socialpolitik, Research Committee Development Economics Abstract: This paper investigates the impact of aid on growth. A clear departure from the vast majority of the existing literature is that we a disaggregate aid by functional classification. Using the GMM SYS approach to dynamic panel estimator we test the three main competing specifications in the aid and growth literature for a sample of aid recipient countries over the 1974-2001 period. Our results clearly show that the different categories of aid exert different effects on growth. Indeed, we find that project aid exerts a positive and significant impact on growth whilst financial programme aid generally impacts on growth negatively. Our results also show that the impact of non-financial aid, technical assistance grants and food aid, is statistically insignificant. We found, however, no evidence to suggest that policy enhances the growth effect of the aid categories. Our non-linearity tests suggest that only project aid is associated with diminishing returns. Finally, our results confirm the finding that climate related conditions affect the working of aid (project). Keywords: Aid; Growth; Dynamic Panel Methods (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:zbw:gdec08:31 Access Statistics for this paper More papers in Proceedings of the German Development Economics Conference, Zurich 2008 from Verein für Socialpolitik, Research Committee Development Economics Contact information at EDIRC. |
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