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Journal of Globalization and Development

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

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

Channing Arndt
  • University of Copenhagen
/ Sam Jones
  • University of Copenhagen
/ Finn Tarp
  • University of Copenhagen and UNU-WIDER
Published Online: 2010-12-27 | DOI: https://doi.org/10.2202/1948-1837.1121

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

About the article

Published Online: 2010-12-27

Citation Information: Journal of Globalization and Development, ISSN (Online) 1948-1837, DOI: https://doi.org/10.2202/1948-1837.1121. Export Citation

©2011 by Walter de Gruyter Berlin Boston. This content is open access.

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