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Aid, growth, and development: Have we come full circle?

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The micro-macro paradox has been revived. Despite broadly positive evaluations at the micro- and meso-levels, recent literature doubts the ability of foreign aid to foster economic growth and development. This paper assesses the aid-growth literature and, taking inspiration from the program evaluation literature, we re-examine key hypotheses. In our findings, aid has a positive and statistically significant causal effect on growth over the long run, with confidence intervals conforming to levels suggested by growth theory. Aid remains a key tool for enhancing the development prospects of poor countries.

Original languageEnglish
JournalJournal of Globalization and Development
Issue number2
Pages (from-to)Article 5
Number of pages27
StatePublished - 2010

ID: 32243831