Query:
faculty: "FEB" and publication year: "2010"
| Authors | M. Chervin, S. van Wijnbergen | | Title | Economic growth and the volatility of foreign aid |
| Year | 2010 |
| Pages | 37 |
| Title series | Tinbergen Institute Discussion Papers |
| Series number | TI 2010-002/2 |
| Faculty | Faculty of Economics and Business |
| Institute/dept. | FEB: Research Institute in Economics and Econometrics Amsterdam (RESAM) |
| Abstract | Foreign aid’s effectiveness in promoting economic growth remains mired in
controversy.We examine the impact of the volatility of aid on economic growth,
controlling for the level of aid. A four-year panel analysis is conducted encompassing
155 countries over the period 1966-2001. We find that once the volatility of aid is
controlled for, aid has a positive impact on economic growth. Correspondingly,
volatility of aid flows is found to be negatively related to growth. We found no
significant link between investment and foreign aid, but a positive correlation between
aid and consumption and a negative link between aid volatility and consumption. But
our results also indicate that aid has become a source of volatility rather than insuring
against it, and in that way may have become inimical to economic growth.
Key Words: foreign aid, volatility, economic growth
JEL codes: O4, O11, O19 |
| Document type | Report |
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