The return to foreign aid
Research output: Working paper › Research
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- wp2015-053
Submitted manuscript, 256 KB, PDF document
We investigate the marginal productivity of investment across countries. The aim is to estimate the return on investments financed by foreign aid and by domestic resource mobilization, using aggregate data. Both returns are expected to vary across countries and time. Consequently we develop a correlated random coefficients model, to estimate the average aggregate return on ‘aid investments’ and ‘domestic investments’. Across different estimators and two different sources for GDP and investment data our findings are remarkably robust; the average gross return on ‘aid investments’ is about 20 per cent. This is in accord with micro estimates of the economic rate of return.
Original language | English |
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Place of Publication | Helsinki, Finland |
Publisher | UNU-WIDER |
Number of pages | 28 |
ISBN (Electronic) | 978-92-9230-942-8 |
Publication status | Published - Jun 2015 |
Series | UNU WIDER Working Paper Series |
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Number | 53 |
Bibliographical note
JEL Classification: C23, F35, O47
- Faculty of Social Sciences - Productivity, growth accounting, foreign aid, random coefficients, panel data
Research areas
Links
- https://www.wider.unu.edu/publications/working-papers/2015/en_GB/wp2015-053/
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