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Aid and Growth Accelerations: An Alternative Approach to Assessing the Effectiveness of Aid
Author(s) -
Dovern Jonas,
Nunnenkamp Peter
Publication year - 2007
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.2007.00376.x
Subject(s) - aid effectiveness , economics , econometrics , estimation , aggregate (composite) , developing country , computer science , economic growth , management , materials science , composite material
SUMMARY The paper applies an alternative approach to assess whether foreign aid promotes economic growth in developing countries, based on the concept of temporary growth accelerations suggested by Hausmann, Pritchett and Rodrik. In addition to aggregate aid, we differentiate between major aid categories, including grants, loans and so‐called short‐impact aid. It turns out that aid flows have a small but significantly positive effect on the conditional probability of growth accelerations. This result holds across different estimation methods. However, the significance of results crucially depends on the criteria applied to identify growth accelerations.