Department of Economics and Business Economics

Finally a breakthrough? The recent rise in the size of the estimates of aid effectiveness

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  • Martin Paldam
  • Hristos Doucouliagos, Deakin University, Melbourne, Australia, Australia
The authors have previously surveyed the AEL, aid (empirical) effectiveness literature, using the technique of meta-analysis. We reached the result that the small positive effect of aid on growth found in the average study is mostly a publication selection bias. This present study concentrates on the new literature from 2007 onward which is divided into: Period (A) 2007-08: where the AEL showed aid ineffectiveness. Period (B) 2009-11: where the results are better. Three hypotheses may explain the upward kink in the results: (i) Aid effectiveness has increased. (ii) A breakthrough has occurred in the models and estimators. (iii) The improve-ment is an artifact. Unfortunately the data support the third hypothesis only.
Original languageEnglish
Title of host publicationHandbook on the Economics of Foreign Aid
EditorsMak Arvin, Byron Law
Number of pages25
Place of publicationNorthampton, MA
PublisherEdward Elgar Publishing
Publication year2015
Pages325-349
Chapter20
ISBN (print)978 1 78347 457 8
ISBN (Electronic)978 1 78347 457 2
Publication statusPublished - 2015

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