Aid, Dutch Disease, and Manufacturing Growth

Raghuram Rajan and Arvind Subramanian

Working Papers from eSocialSciences

Abstract: The authors examine the effects of aid on the growth of manufacturing using a methodology that exploits the variation within countries and across manufacturing sectors and that corrects for possible reverse causality. They find that aid inflows have systematic adverse effects on a country’s competitiveness, as reflected in the lower relative growth rate of exportable industries. They provide some evidence suggesting that the channel for these effects is the real exchange rate appreciation caused by aid inflows. This may explain, in part, why it is hard to find robust evidence that foreign aid helps countries grow.

Keywords: manufacturing growth; aid (search for similar items in EconPapers)
Date: 2014-10
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Aid, Dutch disease, and manufacturing growth (2011)
Working Paper: Aid, Dutch Disease, and Manufacturing Growth (2009)
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