Evaluating Aid Effectiveness in the Aggregate: Methodological Issues

Carl-Johan Dalgaard and Hansen Henrik

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of the present Evaluation Study is to discuss the methodological problems researchers are facing in gauging the impact of aid on economic growth. The discussion is nontechnical and aimed at an audience without much prior knowledge in the fields of macroeconomics and econometrics. The paper provides insights into the following questions: 1. Why do economists view “aid effectiveness” as synonymous to asking whether aid increases growth in income per capita? 2. Why is it difficult to determine the macroeconomic impact of foreign aid on economic growth? 3. How is it, in principle, possible to solve the difficulties present in evaluating aggregate aid effectiveness?

Keywords: Economic growth; foreign aid; instrumental variable regression (search for similar items in EconPapers)
JEL-codes: C13 O11 O47 (search for similar items in EconPapers)
Date: 2009-03
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:23025

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