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Journal of Globalization and Development

Ed. by Emran, M. Shahe / Jayadev, Arjun / Ocampo, José Antonio / Rodrik, Dani / Stiglitz, Joseph

2 Issues per year

Open Access

Aid, Growth, and Development: Have We Come Full Circle?

Channing Arndt1 / Sam Jones2 / Finn Tarp3

1University of Copenhagen

2University of Copenhagen

3University of Copenhagen and UNU-WIDER

This content is open access.
(CC BY-NC-ND 4.0)

Citation Information: Journal of Globalization and Development. Volume 1, Issue 2, ISSN (Online) 1948-1837, DOI: 10.2202/1948-1837.1121, December 2010

Publication History:
Published Online:
2010-12-27

The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro- and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program evaluation literature, we re-examine key hypotheses. In our findings, aid has a positive and statistically significant causal effect on growth over the long run, with confidence intervals conforming to levels suggested by growth theory. Aid remains a key tool for enhancing the development prospects of poor countries.

Keywords: foreign aid; growth; aid effectiveness; causal effects

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