Making Progress on Foreign Aid

Nancy Qian

No 10129, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Foreign aid is one of the most important policy tools that rich countries use for helping poor countries to improve population well-being and facilitate economic and institutional development. The empirical evidence on its benefits is mixed and has generated much controversy. This paper presents descriptive statistics which show that foreign aid to very poor countries accounts for very little of total global aid; reviews the evidence that foreign aid is often determined by the objectives of donor countries rather than the needs of recipient countries; argues that the evidence on the impact of aggregate foreign aid is hindered by problems of measurement and identification, which are partly due to the heterogenous nature of aid; and discusses recent studies using natural and randomized experiments to examine narrowed definitions of aid on more disaggregated outcomes.

Keywords: Development; Global poverty; Political economy (search for similar items in EconPapers)
JEL-codes: O1 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Making Progress on Foreign Aid (2015)
Working Paper: Making Progress on Foreign Aid (2014)
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