Does official aid pave the road for private foreign investment or does it suffocate private initiative by diverting resources towards unproductive activities? In this paper we explore this question using data for a large number of developing and emerging economies. Controlling for countries?...

The partnership between the EU and the ACP countries (that include 38 of the world's 49 least developed countries) has a long standing history and was renewed in 2000 with the Cotonou Agreement. Furthermore, the European Commission has become the world's fifth largest donor of development aid -...

Does official aid pave the road for private foreign investment or does it suffocate private initiative by diverting resources towards unproductive activities? In this paper we explore this question using data for a large number of developing and emerging economies. Controlling for countries'...