In this paper we discuss the results of research into the impact of foreign aid on human development. Rather than focussing on per capita income, as is common in the existing literature, we look at how aid impacts on a range of human development indicators, including measures, of health,...

The impact of aid inflows on relative prices and output is ambiguous. Aid inflows that increase domestic expenditure are likely to cause real exchange rate appreciation, ceteris paribus. However, if this expenditure raises the capital stock in the traded goods sector, then output in this sector...