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,...

We investigate the importance of geo-strategic and commercial motives for the allocation of German aid to 138 countries over the 1973-2010 period. We find that geo-strategic and - less robustly - commercial motives matter. When we relate geo-strategic and commercial motives to the political...

We analyze how adding the shadow economy to official output figures affects technical efficiency. We find that this only slightly affects the ranking of efficiency scores, but increases average efficiency. Our results are robust to the functional form of the production technology and the...