Are There Negative Returns to Aid?

Robert Lensink and Howard White

Journal of Development Studies, 2001, vol. 37, issue 6, 42-65

Abstract: The World Bank report Assessing Aid assumes that an inflow of aid, above a certain level, starts to have negative effects. In this analysis we empirically test this assumption. We find evidence for negative returns to aid at high levels of aid inflows. However, the results are sensitive to both the countries included in the sample and model specification. Moreover, the turning-point above which aid starts to have a negative effect on growth seems to be much higher than assumed in the background calculations for Assessing Aid.

Keywords: Aid Inflows; World Bank Report; Negative Effects; Good Policy; Levels of Aid Inflows; Growth (search for similar items in EconPapers)
Date: 2001
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Working Paper: Are there negative returns to aid? (1999)
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DOI: 10.1080/713601082

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