This paper analyses how monetary policy can enhance the effectiveness of volatile aid fl ows. We find that monetary policy is effective in reducing trade balance volatility. We propose the following taxonomy, excluding the case of emergency assistance. Monetary policy should slow down...

Universal Primary Education is one of the main objectives of development aid. However, very little empirical evidence of its effectiveness actually exists. Until recently, the quality of the available data has not been good enough to obtain robust results about the relationship between...

This paper empirically analyzes the impact of aid on education for about 100 countries over the period 1970-2005. We estimate a system of equations to test whether and to what extent the impact of sector-specific aid on educational attainment depends on (i) the extent to which aid adds to...

This paper empirically analyzes the impact of aid on education for about 100 countries over the period 1970-2005. We estimate a system of equations to test whether and to what extent the impact of sector-specific aid on educational attainment depends on (i) the extent to which aid adds to...

This study investigates the relationship between aid and economic growth and analyses factors that might have influenced this relationship in two major aid recipients regions, Sub-Saharan Africa and Asia that started from similar levels of real GDP per capita but had different patterns of...

In this paper, we develop a growth model in which aid finances infrastructure investment and pro-poor spending in order to analyze ways through which aid can be made more effective. We assume that the recipient countries are aid-dependent in the early phase of development and that they...

Universal Primary Education (UPE) is one of the main objectives of development aid. However, very little empirical evidence of its effectiveness actually exists. Until very recently, the quality of available data was not sufficient to obtain robust results regarding the relationship between...

We argue that donors could improve the effectiveness of foreign aid by pursuing complementary and coherent non-aid policies. In particular, we hypothesize that aid from donors that are open to immigration has stronger growth effects than aid from closed donors. We estimate the aid-growth nexus...

It continues to be heavily disputed whether foreign aid promotes economic growth in developing countries. In most cross-country regressions, aid is considered effective only if it shifts recipient countries to a significantly higher and sustainable growth path. We apply an alternative approach...

This paper examines some of the issues associated with the aid donor process arising from the theory of agency or principal-agent models and endogenous policy determination. The principals may be viewed as legislators and the agents as the aid agency. In addition to adverse selection and moral...