Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid

Boriana Yontcheva and Nadia Masud

No 2005/100, IMF Working Papers from International Monetary Fund

Abstract: This paper assesses the effectiveness of foreign aid in reducing poverty through its impact on human development indicators. We use a dataset of both bilateral aid and NGO aid flows. Our results show that NGO aid reduces infant mortality and does so more effectively than official bilateral aid. The impact on illiteracy is less significant. We also test whether foreign aid reduces government efforts in achieving developmental goals and find mixed evidence of a substitution effect.

Keywords: WP; health expenditure; recipient country government; dependent variable; education expenditure; government effort (search for similar items in EconPapers)
Pages: 31
Date: 2005-05-01
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Citations: View citations in EconPapers (149)

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