Aid effectiveness in sustainable development: A multidimensional approach

Omar A. Guerrero, Daniele Guariso and Gonzalo Castañeda

World Development, 2023, vol. 168, issue C

Abstract: What is the impact of international aid? We answer this question by linking disaggregated aid-flows data to a large set of indicators classified into the Sustainable Development Goals (SDGs). Since such linkage is not perfect (due to the nature of the data), we deploy an artificial intelligence model of the causal process through which changes in aid flows contribute to the dynamics of individual indicators. The model accounts for salient features of real-world development such as multidimensionality, complex interconnections between indicators, heterogeneous aid-to-expenditure ratios, rationally-bounded bureaucracies, fungibility, and the temporal structure of contemporary aid flows across development dimensions. The model does not require cross-country pooled data, so we calibrate its parameters for each of the 146 aid-recipient countries in our sample, preserving important contextual information of each nation. By producing counterfactual simulations where aid is removed, we obtain nuanced estimates of the impact of international assistance during the first decade of the 21st century, at the level of each country, SDG, and indicator. We validate our results using a sector-specific study with similar–but more aggregate–findings. Such a large and detailed picture of the multidimensional impact of aid has not been documented before.

Keywords: Aid; SDGs; Impact evaluation; Development economics; Effectiveness; Government expenditure; Development indicators; Artificial intelligence; Agent-based model (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0305750X23000748
Full text for ScienceDirect subscribers only

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:eee:wdevel:v:168:y:2023:i:c:s0305750x23000748

DOI: 10.1016/j.worlddev.2023.106256

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Catherine Liu ().