Aid, policies, and growth
Abstract
This paper uses a new database on foreign aid to examine the relationships among foreign
aid, economic policies, and growth of per capita GDP. We find that aid has a positive
impact on growth in developing countries with good fiscal, monetary, and trade policies
but has little effect in the presence of poor policies. Good policies are ones that
are themselves important for growth. The quality of policy has only a small impact
on the allocation of aid. Our results suggest that aid would be more effective if
it were more systematically conditioned on good policy. (JEL F350, O230, O400).
Type
Journal articlePermalink
https://hdl.handle.net/10161/2095Collections
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A. Craig Burnside
Mary Grace Wilson Distinguished Professor
Burnside’s fields of specialization include macroeconomics and international finance.
His recent research focuses on foreign exchange markets, empirical methods in finance,
and the behavior of prices in housing markets. He has published articles in a number
of academic journals, including the American Economic Review, the Journal of Political
Economy, the Review of Economic Studies, and the Review of Financial Studies. He is
a Research Associate of the National Bure
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