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Aid Effectiveness on Growth: A Meta Study

Research output: Working paperResearch

  • Hristos Doucouliagos, Deakin University, Melbourne, Australia
  • Martin Paldam
  • Afdeling for Nationaløkonomi
The AEL (aid effectiveness literature) is econo¬metric studies of the macroeconomic effects of development aid. It contains about 100 papers of which 68 are reduced form estimates of theeffect of aid on growth in the recipient country. The raw data show that growth is unconnected to aid, but the AEL has put so much structure on the data that all results possible have emerged. The present meta study considers both the best-set of the 68 papers and the all-set of 543 regressions published. Both sets have a positive average aid-growth elasticity, but it is small and insignificant: The AEL has not established that aid works. Using meta-regression analysis it is shown that about 20 factors influence the results. Much of the variation between studies is an artifact and can be attributed to publication outlet, institu¬tional affiliation, and specification differences. However, some of the difference betweenstudies is real. In particular, the aid-growth association is stronger for Asian countries, and the aid-growth association is shown to have been weaker in the 1970s.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages31
Publication statusPublished - 2005

    Research areas

  • Aid effectiveness, meta study, economic growth

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