The Macroeconomics of Aid: Overview

Addison, Tony; Morrissey, Oliver; Tarp, Finn

doi:10.1080/00220388.2017.1303669

Cited by 36 publications

(17 citation statements)

References 42 publications

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“…Few ODA projects have reduction in hunger as the main operational goal. Yet, since food security is closely linked to development, there is reason to anticipate that aid projects that facilitate local economic growth also reduce the rates of undernutrition in a recipient population, even if the macrolevel effectiveness of development aid may be questioned (Addison, Morrissey, & Tarp, 2017;O'Connell & Smith, 2016).…”

Section: Health Benefits Of Development Aidmentioning

confidence: 99%

Development Aid, Drought, and Coping Capacity

Rustad

Rosvold

Buhaug

2019

The Journal of Development Studies

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Climate change is a major threat to sustained economic growth and wellbeing in the Global South. To what extent does official development assistance (ODA) strengthen recipient communities' capacity to cope with climatic extremes? Here, we investigate whether inflow of development aid mitigates adverse health impacts of subsequent drought among children under 5 years of age, drawing on survey data of nearly 140,000 respondents across 16 countries in Sub-Saharan Africa in combination with georeferenced data on World Banksponsored ODA projects and historical weather statistics. A coarsened exact matching analysis reveals little benefit of development aid on child nutritional status under normal meteorological conditions. However, among children exposed to drought, prior aid allocation is associated with significantly reduced weight loss. While the merit of ODA in facilitating long-term growth remains debated, this study finds consistent indication that multilateral development aid improves recipient communities' capacity to cope with future drought.

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Section: Health Benefits Of Development Aidmentioning

confidence: 99%

Development Aid, Drought, and Coping Capacity

Rustad

Rosvold

Buhaug

2019

The Journal of Development Studies

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“…On the other hand, a number of articles investigating the effect of foreign aid on economic growth have included openness as a control and in many cases as part of an index that included several policy variables (Burnside & Dollar, 2000;Collier & Dollar, 2001;Dalgaard & Hansen, 2000). We refer readers to Addison, Morrisey and Tarp (2017) for an overview of the macroeconomics of aid, in which they describe five generations of aid research and the main controversies surrounding the aidgrowth debate. Starting in the late 1990s and early 2000s, the aid and growth literature mostly focused on analyzing whether aid was effective only when accompanied by a number of "good" economic policies in the recipient countries-the so-called conditionality argument.…”

Section: Literature Reviewmentioning

confidence: 99%

Effects of Foreign Aid on Income through International Trade

Martínez‐Zarzoso¹

2019

PaG

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This article presents a review of recent studies that estimate the trade effects of foreign aid. It also provides new results obtained using panel data techniques to estimate the direct effects of aid on international trade accounting for countries’ participation in free trade agreements, and the indirect effects that aid exerts on income through trade. A structural gravity model of trade augmented with aid and free trade agreement variables is estimated for a cross-section of 33 donor countries and 125 recipient countries over the period 1995 to 2016. In a second step, the indirect effect of aid on income is estimated using a control function approach and instrumental variable techniques. The main results indicate that development aid has a robust direct effect on donor exports (the effect on recipient exports, however, is not robust). It also has an indirect positive effect on income levels in the recipient countries. The effects are heterogeneous and vary by region.

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Section: Literature Reviewmentioning

confidence: 99%

Effects of foreign aid on income through international trade

Martínez‐Zarzoso¹

2019

WIDER Working Paper

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This article presents a review of recent studies that estimate the trade effects of foreign aid. It also provides new results obtained using panel data techniques to estimate the direct effects of aid on international trade accounting for countries' participation in free trade agreements, and the indirect effects that aid exerts on income through trade. A structural gravity model of trade augmented with aid and free trade agreement variables is estimated for a cross-section of 33 donor countries and 125 recipient countries over the period 1995 to 2016. In a second step, the indirect effect of aid on income is estimated using a control function approach and instrumental variable techniques. The main results indicate that development aid has a robust direct effect on donor exports (the effect on recipient exports, however, is not robust). It also has an indirect positive effect on income levels in the recipient countries. The effects are heterogeneous and vary by region.

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The Macroeconomics of Aid: Overview

Cited by 36 publications

References 42 publications

Development Aid, Drought, and Coping Capacity

Development Aid, Drought, and Coping Capacity

Effects of Foreign Aid on Income through International Trade

Effects of foreign aid on income through international trade

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