Over the past decade, development policy has witnessed a clear shift towards a poverty reduction agenda. Unsurprisingly, this has been accompanied by changes in views concerning development finance. A dominant refrain of the present agenda is that ‘traditional’ approaches to development...

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...

The recent financial crisis has rekindled interest in the foreign aid supply behaviour of bilateral donors. Using the latest data covering the period 1960-2009, this paper examines how such behaviour is related to domestic factors. Based on a simple empirical model, a distinction is made between...

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...

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...

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...