Little attention has been devoted to the effects of price dispersion at local and seasonal levels on the measurement of living standards in LDCs. In particular, it is not known if a substantial share of welfare or poverty is the consequence of price differences rather than of differences in...

This paper provides a critical analysis of the growth regressions in Burnside and Dollar (2000). First, we analyze the relation between aid and government expenditure in a modified neoclassical growth model. We find that while good policies spur growth they may at the same time lead to...

This paper deals with the effectiveness of several alternative models of aid allocation in terms of poverty reduction. We use a model that admits the presence of diminishing returns to aid in the output and poverty functions. We shall discuss the impact of aid on poverty in a single country,...

Using data from several seasons in Rwanda, we test the indpendence between Laspeyres local and seasonal price indices and nominal living standards in Rwanda. the results show that the hypothesis of independence cannot generally be rejected in rwanda, although the choice of the adult-equivalence...

This paper takes a fresh look at three issues in the aid effectiveness debate. First, we assess the theoretical case for foreign aid. Using an endogenous growth version of the standard overlapping generations model, we show that aid can be an effective policy tool in spurring growth in poor...

Comparing aid flows in the 1990s with those from the 1970s make it clear that there are now many more countries receiving what may be termed "high aid" (say in excess of 30 percent of GNP) and that there has emerged a group of countries receiving very high aid. Whilst never formally considered...