Variations of bilateral aid flows are difficult to explain on the basis of official development objectives or recipient need. At the example of US aid to Pakistan, this paper suggests alternative political economic explanations, notably the relevance of ethnic lobbying and the relevance of US...

This paper uses a static and dynamic gravity model of trade to investigate the link between German development aid and exports from Germany to the recipient countries. The findings indicate that in the long run,German aid is associated with an increase in exports of goods that is larger than the...

Foreign aid is given for a combination of economic, political, and humanitarian motives. While its impact on economic development in recipient countries has been the main focus of research recently, we concentrate on the question to what extent it also promotes donor countries’ exports. We...

We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. For a large sample of 145 recipient...

Careful consideration of the appropriate level and composition of aggregate public spending is vital in low income countries, especially in the presence of large volumes of foreign aid. Not only can expansion of the public sector weaken economic growth, but also provision of public services may...

This paper examines the effect of aid on domestic savings in Sub-Saharan Africa. It departs from the previous literature on aid and savings in developing countries by abandoning the pervasive, but untenable, assumption that all aid is used to expand the trade deficit and thus applied wholly to...

This paper analyses macroeconomic aspects of exit from aid-dependence. By 'exit from aid', we mean substantial and enduring decline over time in Official Development Assistance (ODA) as a share of Gross Domestic Product (GDP). The relevant macroeconomic variables are identified by systematically...

This paper discusses the impact of foreign aid on the recipient country's preparedness against natural disasters. The theoretical model shows that foreign aid can have two opposing effects on a country's level of mitigating activities. In order to test the theoretical propositions we analyse the...

This Policy Contribution provides up-to-date evidence of the strong heterogeneity in the relationships between the five biggest EU economies with the Southern Mediterranean Countries (SMCs). Algeria, Morocco and Tunisia are still strongly tied to France, Italy and Spain, in terms of investments,...

During the last five years, Bolivia received more than $US 3,000 million in foreign aid and more than $US 3,500 million in Foreign Direct Investment (FDI). The country also received debt relief with a net present value of $US 1,300 million and implemented a National Poverty Reduction Strategy....