Does development aid help poor countries catch up?

Tryggvi Herbertsson (tryggvi@taurus.is) and Martin Paldam

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: Aid flows are included into the standard cross-country catch-up relation. Robust¬ness of the result is tested by changing time periods and by adding extra variables. The main results are: Absolute conver¬gence and absolute aid effec¬ti¬ve¬ness are both rejected. While conditional convergence is accepted, conditional aid effecti¬ve¬ness is found to be weak. The two relations are largely inde¬pendent. However, aid has a clear activity effect in the short run. Finally, we try to divide the countries into an A-group where aid is effective and a B-group where it harms. Several criteria of division were explored, but none were very successful – the most satisfactory is the one that divides countries according to their level of development.

Keywords: Convergence; growth; development aid effectiveness (search for similar items in EconPapers)
JEL-codes: C14 C23 F35 O4 (search for similar items in EconPapers)
Pages: 26
Date: 2005-07-21
New Economics Papers: this item is included in nep-afr, nep-dev and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://repec.econ.au.dk/repec/afn/wp/05/wp05_16.pdf (application/pdf)

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:aah:aarhec:2005-16

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business Economics, Aarhus University
Bibliographic data for series maintained by (bhoejklint@econ.au.dk).