In a report presented at the UN Conference on Financing for Development in March 2002, the World Bank claims that the effectiveness of its financial aid has improved substantially by targeting aid at poor developing countries pursuing sound economic policies. However, the World Bank's success...

Recent studies offer an ambiguous picture on the effectiveness of foreign aid in strengthening the export capacity of recipient countries. Moreover, the literature on aid for trade (AfT) has often neglected that exporters in the donor countries may be among the main beneficiaries. We hypothesize...

We raise the hypothesis that aid specifically targeted at economic infrastructure helps developing countries attract higher FDI inflows through improving their endowment with infrastructure in transportation, communication, energy and finance. By performing 3SLS estimations we explicitly account...

Our empirical estimations indicate that aid-for-trade granted by OECD donors strengthens the trade relations of recipient countries with other developing countries. By focusing on South-South trade we mitigate endogeneity concerns that have plagued analyses of trade between recipients and donors...

Political proximity between donor and recipient governments may impair the effectiveness of aid by encouraging favoritism. By contrast, political misalignment between donor and recipient governments may render aid less effective by adding to transaction costs and giving rise to incentive...

We argue that donors could improve the effectiveness of foreign aid by pursuing complementary and coherent non-aid policies. In particular, we hypothesize that aid from donors that are open to immigration has stronger growth effects than aid from closed donors. We estimate the aid-growth nexus...