Why would bilateral donors intermediate aid through a multilateral and not extend aid directly? This paper suggests a trade-off: multiple bilateral donors for each recipient may imply coordination and strategic problems but intermediating through a multilateral may dilute individual donor...

This paper uses the gravity model of trade to investigate the link between foreign aid and exports in recipient countries. Most of the theoretical work emphasizes the negative impact of aid on recipient countries’ exports primarily due to exchange rate appreciation, disregarding possible...

The goal of this paper is to use a simple causality test in the spirit of Granger to answer three questions on the relationship between the foreign aid disbursements of a donor country and its level of happiness. First, do higher aid flows make a donor happier? Second, does a happier donor give...

The nature of the relationship between the provision of foreign aid to developing countries and the subsequent social and economic benefits experienced by them has long been debated. A small group of studies focus on the connection between aid and child school enrolment. However, these studies...

This paper investigates the effect of foreign aid on corruption using a quantile regression method. Our estimation results illustrate that foreign aid generally lessens corruption and, in particular, its reduction effect is larger in countries with low levels of corruption. In addition,...

This chapter explains the incentives facing donors that lead them to fragment their foreign aid effortis over a large number of recipients, sectros, and projects. It summarizes cross-country evidence suggesting that fragmentation may reduce quality of the public administration in aid recipients,...

We develop a theoretical model to compare the two major foreign aid modalities: project aid and budget support. These two modalities have a different impact on the production of 'developmental goods'. Firstly, conditionality can be associated with budget support, but only a subset of the...

Does foreign aid reduce extreme poverty in Peru? Under a quatitative analysis the paper shows big doubts for this hypothesis. Donor fragmentation and inadequate planification are two drivers in the explanation. Impact evaluations are necessary and Peru has enough techical capacity to carry on...

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...

This study evaluates the Philippines` absorptive performance for foreign aid, particularly during the six-year period 2003 to 2008, and compare this to that of the previous period, 1986 to 1988. We observe that the country`s capacity to absorb foreign aid has declined during the period under...