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Economic Aid to Post-conflict Countries: A Methodological Critique of Collier and Hoeffler

Author

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  • Astri Suhrke
  • Espen Villanger
  • Susan L. Woodward

Abstract

This paper retests the analysis of "Aid Policy and Growth in Post-Conflict Societies," by Paul Collier and Anke Hoeffler (October 2002 and forthcoming in European Economic Review). It finds that their data and analysis do not support their conclusions and policy recommendations on the optimal timing and amounts of aid. These conclusions depend on very few observations (13 for the period of peace-onset, 13 for years 4 to 7 when a growth spurt is said to make aid particularly effective, and 8 for the period when aid should taper off); are vulnerable to the same methodological misspecifications identified in the Burnside and Dollar approach on which this analysis is based; and are not grounded in any theoretical formulation about the special relation between aid and growth in post-conflict conditions. Conventional econometric procedures are often not followed; recoding the sample to exclude cases that are not civil wars reduces the effect of aid on growth in post-civil war countries to less than half of what they claim; and the difference with the relationship for "normal" countries becomes negligible (0.26 percentage points), although it depends on identification of the sample. Their claims on the poverty-efficiency of aid are assumed, not analysed. The confidentiality of their policy measure (CPIA) prevented testing the aid-policy relationship.

Suggested Citation

  • Astri Suhrke & Espen Villanger & Susan L. Woodward, 2005. "Economic Aid to Post-conflict Countries: A Methodological Critique of Collier and Hoeffler," CMI Working Papers WP 2005:4, CMI (Chr. Michelsen Institute), Bergen, Norway.
  • Handle: RePEc:chm:wpaper:wp2005-4
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    Cited by:

    1. Serhan Cevik & Mohammad Rahmati, 2015. "Breaking the Curse of Sisyphus: An Empirical Analysis of Post-Conflict Economic Transitions," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 57(4), pages 569-597, December.
    2. Carlos Bozzoli & Tilman Brück & Thorsten Drautzburg & Simon Sottsas, 2008. "Economic Costs of Mass Violent Conflicts: Final Report for the Small Arms Survey, Geneva, Switzerland," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 42, number pbk42.
    3. Umit Hacioglu & Hasan Dincer & Ismail Erkan Celik, 2012. "Economic Approach to Conflict Issue: Investment in Post- Conflict Situation for International Business," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 3(5), pages 1-8, September.
    4. James Boyce & Shepard Forman, 2010. "Financing Peace: International and National Resources for Postconflict Countries and Fragile States," Working Papers wp238, Political Economy Research Institute, University of Massachusetts at Amherst.

    More about this item

    Keywords

    Economic aid Post-conflict Methodology;

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