We use an excludable instrument to test the effect of foreign aid on economic growth, in a sample of 73 countries over the 1966-2009 period. We interact donors legislature fractionalization with a recipient country s probability to receive aid. The results show fractionalization to increase...

This paper analyzes the effectiveness of debt relief and foreign aid in a neoclassical growth framework with a conflict of interest between the donor and the recipient government. Conditionality is modeled as a dynamic contract that is enforceable only by the threat of aid sanctions....

We analyze the aid portfolio of various bilateral and multilateral donors, testing whether they have prioritised aid in line with the Millennium Development Goals (MDGs). In doing so, we combine sectorally disaggregated aid data with indicators reflecting the situation of recipient countries...

We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Donor countries political motives might reduce the effectiveness of conditionality, channel aid to inferior projects, reduce the aid bureaucracy s effort, and change the power structure in the...

The paper explores the relationships between economic freedom on the one side and development aid and IMF credit as approximation for conditional aid on the other side. After a short review of current literature the paper develops a simple panel regression model to evaluate the relationships. In...

There have been ongoing discussions within the WTO Doha Round on Trade Facilitation and the wider Aid for Trade agenda to assist developing countries in reducing behind-the-border restrictions and to help them benefit from trade reform. Our paper contributes to this debate by analyzing the...

This paper makes two main contributions. First, we examine the long-run effect of foreign aid on domestic output for 59 developing countries using heterogeneous panel cointegration techniques to control for omitted variable and endogeneity bias and to detect possible cross-country differences in...

In this paper we investigate the effectiveness of development aid in recipient countries. Specifically, we analyze the relationship between per-capita income and foreign aid for a maximum of 131 recipient countries over the 1960 to 2006 period. We employ annual data and 5-year averages and,...

This paper presents a two-sector small semi-open economy Ramsey growth model involving foreign aid as an input in the production function. An activist government allocates this input endogenously across sectors and optimizes policies in a non-standard way. Once calibrated, mainly on countries...

This paper analyses the impact of health foreign assistance on physicians' brain drain. We use the database from Bhargava and Docquier (2008) to explain physicians' brain drain and health foreign assistance from 1995 to 2003 using a bilateral gravity equation model. In the first time, we propose...