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The Impact of Foreign Aid on Aggregate Welfare Measures: A Panel Data Analysis

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  • José Alves

    (Universidade de Lisboa)

  • Cláudia Couto

    (The University of Nottingham)

  • José Carlos Coelho

    (Universidade de Lisboa)

Abstract

Does foreign aid enhance aggregate human welfare? This paper attempts to answer this question by using a panel data of 28 countries, covering the period of 1990 to 2014. It explores within-country variation by dividing the sample into low-income and middle-income countries and then uses a fixed effects estimator to control for the heterogeneity of the effects of aid on welfare measures. The main conclusion confirms that there is no evidence that foreign aid contributes to the reduction of infant mortality or the increase of the human development index.

Suggested Citation

  • José Alves & Cláudia Couto & José Carlos Coelho, 2024. "The Impact of Foreign Aid on Aggregate Welfare Measures: A Panel Data Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1210-1230, March.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:1:d:10.1007_s13132-023-01119-w
    DOI: 10.1007/s13132-023-01119-w
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    More about this item

    Keywords

    Foreign aid; Infant mortality; Human development index; Low-middle-income countries; Middle-income countries;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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