IDEAS home Printed from https://ideas.repec.org/p/aah/aarhec/2009-17.html
   My bibliography  Save this paper

Development Aid and Growth: An association converging to zero

Author

Listed:
  • Hristos Doucouliagos

    (Deakin University, Melbourne, Australia)

  • Martin Paldam

    (School of Economics and Management, Aarhus University, Denmark)

Abstract

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.

Suggested Citation

  • Hristos Doucouliagos & Martin Paldam, 2009. "Development Aid and Growth: An association converging to zero," Economics Working Papers 2009-17, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2009-17
    as

    Download full text from publisher

    File URL: https://repec.econ.au.dk/repec/afn/wp/09/wp09_17.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Felicitas Nowak-Lehmann D. & Inmaculada Martínez-Zarzoso & Dierk Herzer & Stephan Klasen & Axel Dreher, 2009. "In Search for a Long-run Relationship between Aid and Growth: Pitfalls and Findings," Ibero America Institute for Econ. Research (IAI) Discussion Papers 196, Ibero-America Institute for Economic Research.
    2. De Long, J Bradford & Lang, Kevin, 1992. "Are All Economic Hypotheses False?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1257-1272, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christian Lessmann & Gunther Markwardt, 2010. "Decentralization and Foreign Aid Effectiveness: Do Aid Modality and Federal Design Matter in Poverty Alleviation?," CESifo Working Paper Series 3035, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Doucouliagos, Hristos & Paldam, Martin, 2011. "The ineffectiveness of development aid on growth: An update," European Journal of Political Economy, Elsevier, vol. 27(2), pages 399-404, June.
    2. Darren Grant & William Green, 2013. "Grades as incentives," Empirical Economics, Springer, vol. 44(3), pages 1563-1592, June.
    3. Dominika Reckova & Zuzana Irsova, 2015. "Publication Bias in Measuring Anthropogenic Climate Change," Energy & Environment, , vol. 26(5), pages 853-862, September.
    4. Alexander Libman & Joachim Zweynert, 2014. "Ceremonial Science: The State of Russian Economics Seen Through the Lens of the Work of ‘Doctor of Science’ Candidates," Working Papers 337, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    5. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    6. Rajeev Dehejia, 2013. "The Porous Dialectic: Experimental and Non-Experimental Methods in Development Economics," WIDER Working Paper Series wp-2013-011, World Institute for Development Economic Research (UNU-WIDER).
    7. Abel Brodeur & Mathias Lé & Marc Sangnier & Yanos Zylberberg, 2016. "Star Wars: The Empirics Strike Back," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 1-32, January.
    8. Guillaume Coqueret, 2023. "Forking paths in financial economics," Papers 2401.08606, arXiv.org.
    9. Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
    10. Stanley, T. D. & Doucouliagos, Chris, 2019. "Practical Significance, Meta-Analysis and the Credibility of Economics," IZA Discussion Papers 12458, Institute of Labor Economics (IZA).
    11. Tomas Havranek & Zuzana Irsova, 2017. "Do Borders Really Slash Trade? A Meta-Analysis," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(2), pages 365-396, June.
    12. Fišar, Miloš & Greiner, Ben & Huber, Christoph & Katok, Elena & Ozkes, Ali & Management Science Reproducibility Collaboration, 2023. "Reproducibility in Management Science," Department for Strategy and Innovation Working Paper Series 03/2023, WU Vienna University of Economics and Business.
    13. Gechert, Sebastian & Mey, Bianka & Opatrny, Matej & Havranek, Tomas & Stanley, T. D. & Bom, Pedro R. D. & Doucouliagos, Hristos & Heimberger, Philipp & Irsova, Zuzana & Rachinger, Heiko J., 2023. "Conventional Wisdom, Meta-Analysis, and Research Revision in Economics," EconStor Preprints 280745, ZBW - Leibniz Information Centre for Economics.
    14. Marek Rusnak & Tomas Havranek & Roman Horvath, 2013. "How to Solve the Price Puzzle? A Meta-Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(1), pages 37-70, February.
    15. Nick Huntington‐Klein & Andreu Arenas & Emily Beam & Marco Bertoni & Jeffrey R. Bloem & Pralhad Burli & Naibin Chen & Paul Grieco & Godwin Ekpe & Todd Pugatch & Martin Saavedra & Yaniv Stopnitzky, 2021. "The influence of hidden researcher decisions in applied microeconomics," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 944-960, July.
    16. Christopher Snyder & Ran Zhuo, 2018. "Sniff Tests as a Screen in the Publication Process: Throwing out the Wheat with the Chaff," NBER Working Papers 25058, National Bureau of Economic Research, Inc.
    17. Havranek, Tomas & Irsova, Zuzana & Gechert, Sebastian & Kolcunova, Dominika, 2019. "Death to the Cobb-Douglas Production Function? A Meta-Analysis of the Capital-Labor Substitution Elasticity," MetaArXiv 6um5g, Center for Open Science.
    18. Paolo Crosetto & Antonio Filippin & Janna Heider, 2015. "A Study of Outcome Reporting Bias Using Gender Differences in Risk Attitudes," CESifo Economic Studies, CESifo Group, vol. 61(1), pages 239-262.
    19. Beltrán, Allan & Maddison, David & Elliott, Robert J R, 2018. "Is Flood Risk Capitalised Into Property Values?," Ecological Economics, Elsevier, vol. 146(C), pages 668-685.
    20. Abel Brodeur & Scott Carrell & David Figlio & Lester Lusher, 2023. "Unpacking P-hacking and Publication Bias," American Economic Review, American Economic Association, vol. 113(11), pages 2974-3002, November.

    More about this item

    Keywords

    Aid effectiveness; meta-regression analysis; economic growth;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aah:aarhec:2009-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.econ.au.dk/afn/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.