There is little consensus on whether foreign aid can reliably increase economic growth in recipient countries. We review the literature on aid allocation and provide new evidence suggesting that since 1990 aid donors reward political contestation but not political inclusiveness. Then we examine...

Relying on a new institutional economics analysis of transaction costs, the 2005 Paris Declaration on Aid Effectiveness emphasizes donor harmonization as an intermediate objective for increasing the effectiveness of foreign assistance in bringing about development outcomes. Surveys on adherence...