What Is the Aggregate Economic Rate of Return to Foreign Aid?
Research output: Contribution to journal › Journal article › Research › peer-review
In recent years, academic studies have been converging towards the view that foreign aid promotes aggregate economic growth. We employ a simulation approach to: (i) validate the coherence of empirical aid-growth studies published since 2008; and (ii) calculate plausible ranges for the rate of return to aid. Our results highlight the long run nature of aid-financed investments and the importance of channels other than accumulation of physical capital. We find the return to aid lies in ranges commonly accepted for public investments and there is little to justify the view that aid has had a significant pernicious effect on productivity.
Original language | English |
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Journal | The World Bank Economic Review |
Volume | 30 |
Issue number | 3 |
Pages (from-to) | 446-474 |
Number of pages | 29 |
ISSN | 0258-6770 |
DOIs | |
Publication status | Published - 28 Jul 2015 |
Bibliographical note
JEL codes: E1, O11, O41
- Faculty of Social Sciences - E1, O11, O41
Research areas
ID: 146208306