Controversy over the aggregate impact of foreign aid has focused on reduced form estimates of the aid-growth link. The causal chain, through which aid affects developmental outcomes including growth, has received much less attention. We address this gap by: (i) specifying a structural model of...

This paper confirms recent evidence of a positive impact of aid on growth and widens the scope of evaluation to a range of outcomes including proximate sources of growth (e.g., physical and human capital), indicators of social welfare (e.g., poverty and i

Raising schooling quality in low-income countries is a pressing challenge. Substantial research has considered the impact of cutting class sizes on skills acquisition. Considerably less attention has been given to the extent to which peer effects, which r

Mozambique has achieved remarkable macroeconomic success over recent decades, boasting one of the world.s highest rates of GDP growth. However, absolute poverty remains persistent, spilling over into social unrest. To better understand the link between ag

The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro and meso-levels, recent literature has turned decidedly pessimistic with respect to the ability of foreign aid to foster economic growth. Policy implications, such as the complete cessation of aid to...

The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program...

Does foreign aid promote aggregate economic growth? In contrast to widespread perceptions, academic studies of this question have been rapidly converging towards a positive answer. We employ a simulation approach to (i) validate the coherence of recent em

Changes in the relative prices of commodities consumed in different shares across income groups are known to influence real measures of inequality. Using household budget survey and price data in Mozambique from 2002/03 and 2008/09, we show that accountin

What determines how much foreign aid donors provide? Existing answers to this question point to a complex range of influences. However, the tasks of distinguishing between long- and short-run factors, as well as differences between donors, have not been adequately addressed. Taking advantage of...