Donor agencies and recipient governments want to assess the effectiveness of aid-supported sector policies. Unfortunately, existing methods for impact evaluation are designed for the evaluation of homogeneous interventions (‘projects’) where those with and without ‘treatment’ can be...

The Macroeconomic Aid Effectiveness Literature (Macro AEL) has had a resounding effect both within the academic community and within the policy arena where its policy recommendations carry substantial weight. Although the empirical aspect of this literature has received substantial scrutiny, the...

This paper empirically studies the impact of decentralization on foreign aid effectiveness. For this purpose, we examine a commonly used empirical growth model, considering aid modality as well as different measures of political and fiscal decentralization. Our panel estimations reveal that...

This paper takes a fresh look at two issues in the aid effectiveness debate. We begin by providing theoretical foundations for the various claims made with regard to the effectiveness of aid in stimulating long-run productivity. When foreign aid is modelled as an exogenous transfer of income or...