Reasonable Expectations and the First Millennium Development Goal: How Much Can Aid Achieve?

TY - JOUR

T1 - Reasonable Expectations and the First Millennium Development Goal

T2 - How Much Can Aid Achieve?

AU - Dalgaard, Carl-Johan Lars

AU - Ericksson, Lennart

PY - 2009

Y1 - 2009

N2 - Using a calibrated neoclassical growth model, we address three questions: (i) how much growth should aid flows have produced in Sub-Saharan Africa over the last three decades? (ii) how much aid would be needed to attain the First Millennium Development Goal (MDG#1) of cutting poverty in half by 2015? (iii) taking proposed aid flows as given, how much would structural characteristics, such as domestic savings rates and productivity, have to change in order to reach the MDG#1? Our analysis indicates that past and future expectations for aid in fostering growth and poverty reduction have been too high.

AB - Using a calibrated neoclassical growth model, we address three questions: (i) how much growth should aid flows have produced in Sub-Saharan Africa over the last three decades? (ii) how much aid would be needed to attain the First Millennium Development Goal (MDG#1) of cutting poverty in half by 2015? (iii) taking proposed aid flows as given, how much would structural characteristics, such as domestic savings rates and productivity, have to change in order to reach the MDG#1? Our analysis indicates that past and future expectations for aid in fostering growth and poverty reduction have been too high.

KW - Faculty of Social Sciences

KW - foreign aid

KW - economic growth

U2 - 10.1016/j.worlddev.2008.11.003

DO - 10.1016/j.worlddev.2008.11.003

M3 - Journal article

SN - 0305-750X

VL - 37

SP - 1170

EP - 1181

JO - World Development

JF - World Development

IS - 7

ER -