The First Millennium Development Goal (MDG#1) is to cut the fraction of global population living on less than one dollar per day in half, by 2015. Foreign aid financed investments may contribute to the attainment of this goal. But how much can aid be reasonably expected to accomplish? A...

The First Millennium Development Goal (MDG#1) is to cut the fraction of global population living on less than one dollar per day in half, by 2015. Foreign aid financed investments may contribute to the attainment of this goal. But how much can aid be reasonably expected to accomplish? A...

Summary Using a calibrated neoclassical growth model, we address three questions: (i) how much growth should aid flows have produced in Sub-Saharan Africa over the last three decades? (ii) how much aid would be needed to attain the First Millennium Development Goal (MDG#1) of cutting poverty in...

While a political consensus has emerged to increase aid flows to Sub-Saharan Africa, empirical studies of the effectiveness of aid in stimulating growth and reducing poverty have yet to yield conclusive results. The present paper takes a different approach. Using the standard neoclassical growth...

Intro -- Contents -- I. INTRODUCTION -- II. BASIC FRAMEWORK -- III. BASELINE CALIBRATIONS -- IV. DOMESTIC ADDITIONAL EFFORT, POVERTY TRAPS, AND "TAKEOFF" -- V. EXTENSIONS -- VI. CONCLUDING REMARKS -- REFERENCES.