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Development Aid and Economic Growth: A Positive Long-Run Relation
Author:
Sanjay Reddy null

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and
Ms. Camelia Minoiu
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 118
Language:
English
Publication Date:
01 May 2009
DOI:
https://doi.org/10.5089/9781451872651.001
ISBN:
9781451872651
ISSN:
1018-5941
Pages:
32
Keywords:
WP; donor country; aid-quality donor ranking; donor characteristic; growth rate; development aid; donor nation; donor-recipient match
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We analyze the growth impact of official development assistance to developing countries. Our approach is different from that of previous studies in two major ways. First, we disentangle the effects of two kinds of aid: developmental and non-developmental. Second, our specifications allow for the effect of aid on economic growth to occur over long periods. Our results indicate that developmental aid promotes long-run growth. The effect is significant, large and robust to different specifications and estimation techniques.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund