Department of Economics and Business Economics

Development Aid and Growth: An association converging to zero

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  • Wp09 17

    Final published version, 164 KB, PDF document

  • Hristos Doucouliagos, Deakin University, Melbourne, Australia
  • Martin Paldam
  • School of Economics and Management
This note deals with a paradox: A literature growing exponentially in spite of the fact that it keeps finding the same result. We draw upon the findings of 106 empirical studies, of which 32 appeared in the last 4 years, to examine whether development aid generates economic growth. The studies report aid effects that have been steadily falling over time. The newer studies find a steady continuation of the downward trend. Using meta-regression analysis, we show that total aid has never had an effect on economic growth. Theoretically, this result might be due to simultaneity bias, but the evidence does not support this notion. There is some evidence that some aid components do have a positive effect on growth.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages10
Publication statusPublished - 2009

    Research areas

  • Aid effectiveness, meta-regression analysis, economic growth

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