Aid has been the principal source of development finance for the majority of developing countries over the past few decades. This has spawned a large literature on the effectiveness of aid, which remains essentially inconclusive. The empirical literature has tended to evaluate the impact of aid...

Two findings have been common in the literature on the impact of foreign aid on public sector fiscal behaviour in developing countries. The first is that aid "sticks" to higher levels of recipient government expenditure, with aggregate expenditure often rising by more than the value of the aid...

This paper demonstrates that an empirical link between aid and trade exist (for some donor-recipient pairs), but that the nature of this linkage is complex and can take a variety of forms. By identifying this complexity (and variability) we challenge the assertion, often made in debates...