FOREIGN AID AND DEVELOPMENT: LOOKING BEYOND THE GROWTH EFFECT

Mohammadou Nourou

Journal of Economic Development, 2014, vol. 39, issue 4, 99-115

Abstract: On the question of whether aid stimulates GDP growth, the profession provides inconclusive and often contradictory findings. While waiting for a stronger consensus, this paper analyzes the direct effect of aid on other non-monetary dimensions of development. I construct an index of social and human development similar to the UNDP¡¯s human development index but which differs from it by excluding per capita GDP. Using both non-parametric and parametric methods, I find a negative relationship between aid and social development. After controlling for per capita income, the econometric analysis suggests that higher dependence on foreign aid worsens social and human development.

Keywords: Aid; Social Development; Human Development (search for similar items in EconPapers)
JEL-codes: F35 O15 O19 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:39:y:2014:i:4:p:99-115

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