Aid Effectiveness: Opening the Black Box

Channing Arndt; Edward Samuel Jones; Finn Tarp

Aid Effectiveness: Opening the Black Box

Channing Arndt, Edward Samuel Jones, Finn Tarp

Abstract

Controversy over the aggregate impact of foreign aid has focused on reduced form estimates of the aid-growth link. The causal chain, through which aid affects developmental outcomes including growth, has received much less attention. We address this gap by: (i) specifying a structural model of the main relationships; (ii) estimating the impact of aid on a range of final and intermediate outcomes; and (iii) quantifying a simplied representation of the full structural form, where aid impacts on growth through key intermediate outcomes. A coherent picture emerges: aid stimulates growth and reduces poverty through physical capital investment and improvements in health.

Original language	English
Place of Publication	Helsinki
Publisher	UNU-WIDER
Number of pages	30
ISBN (Print)	978-9292304119
Publication status	Published - 2011

Keywords

Faculty of Social Sciences

Access to Document

http://www.wider.unu.edu/publications/working-papers/2011/en_GB/wp2011-044/

Cite this

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title = "Aid Effectiveness: Opening the Black Box",

abstract = "Controversy over the aggregate impact of foreign aid has focused on reduced form estimates of the aid-growth link. The causal chain, through which aid affects developmental outcomes including growth, has received much less attention. We address this gap by: (i) specifying a structural model of the main relationships; (ii) estimating the impact of aid on a range of final and intermediate outcomes; and (iii) quantifying a simplied representation of the full structural form, where aid impacts on growth through key intermediate outcomes. A coherent picture emerges: aid stimulates growth and reduces poverty through physical capital investment and improvements in health.",

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AU - Jones, Edward Samuel

AU - Tarp, Finn

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PY - 2011

Y1 - 2011

N2 - Controversy over the aggregate impact of foreign aid has focused on reduced form estimates of the aid-growth link. The causal chain, through which aid affects developmental outcomes including growth, has received much less attention. We address this gap by: (i) specifying a structural model of the main relationships; (ii) estimating the impact of aid on a range of final and intermediate outcomes; and (iii) quantifying a simplied representation of the full structural form, where aid impacts on growth through key intermediate outcomes. A coherent picture emerges: aid stimulates growth and reduces poverty through physical capital investment and improvements in health.

AB - Controversy over the aggregate impact of foreign aid has focused on reduced form estimates of the aid-growth link. The causal chain, through which aid affects developmental outcomes including growth, has received much less attention. We address this gap by: (i) specifying a structural model of the main relationships; (ii) estimating the impact of aid on a range of final and intermediate outcomes; and (iii) quantifying a simplied representation of the full structural form, where aid impacts on growth through key intermediate outcomes. A coherent picture emerges: aid stimulates growth and reduces poverty through physical capital investment and improvements in health.

KW - Faculty of Social Sciences

M3 - Working paper

SN - 978-9292304119

BT - Aid Effectiveness

PB - UNU-WIDER

CY - Helsinki

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