Aid, Policies, and Growth

David Dollar and Craig Burnside

American Economic Review, 2000, vol. 90, issue 4, 847-868

Abstract: This paper uses a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth per capita GDP. We find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies. Good policies are ones that are themselves important for growth. The quality of policy has only a small impact on the allocation of aid. Our results suggest that aid would be more effective if it were more systematically conditioned on good policy.

JEL-codes: F35 O19 O23 (search for similar items in EconPapers)
Date: 2000
Note: DOI: 10.1257/aer.90.4.847
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Working Paper: Aid, policies, and growth (1997)
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