The curse of aid

@article{Djankov2006TheCO,
  title={The curse of aid},
  author={Simeon Djankov and Jose G Montalvo and Marta Reynal-Querol},
  journal={Journal of Economic Growth},
  year={2006},
  volume={13},
  pages={169-194}
}
Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the “curse of natural resources” literature. In this paper we discuss this effect and document its magnitude. Using panel data for 108 recipient countries in the period 1960–1999, we find that foreign aid has a negative impact on institutions. In particular, if the foreign aid over GDP that a country receives over a period of 5 years reaches the 75th percentile… 

Rents and the Political Economy of Development Aid

Empirical studies suggest little impact of foreign aid on growth on average. As aid can be viewed as a sovereign rent akin to natural resource rents, it is likely that rent seeking plays a role in

MORE AID, LESS DEMOCRACY? A Panel Data Analysis

Foreign aid flows have increased considerably during the last decades targeting, apart from the economic development of recipients, several goals related to their democratization process. In this

When Does More Aid Imply Less Democracy? An Empirical Examination

Foreign aid flows have increased considerably during the last decades, targeting, apart from development objectives, goals related to democracy. In this paper we investigate whether aid has affected

The Effects of Aid on Rights and Governance: Evidence from a Natural Experiment

Does foreign aid promote good governance in recipient countries? We help arbitrate the debate over this question by leveraging a novel source of exogeneity: the rotating presidency of the Council of

Aid Is Not Oil: Donor Utility, Heterogeneous Aid, and the Aid-Democratization Relationship

  • S. Bermeo
  • Economics
    International Organization
  • 2015
Abstract Recent articles conclude that foreign aid, like other nontax resources, inhibits political change in authoritarian regimes. This article challenges both the negative political effects of aid

Aid and democracy redux

...

References

SHOWING 1-10 OF 77 REFERENCES

On the Empirics of Foreign Aid and Growth

This paper takes a fresh look at three issues in the aid effectiveness debate. First, we assess the theoretical case for foreign aid. Using an endogenous growth version of the standard overlapping

Does aid affect governance

Why is there little robust evidence that foreign aid significantly enhances the economic growth of poor countries? The search for an explanation is becoming immensely important as industrial

Foreign aid and rent-seeking

The Anarchy of Numbers: Aid, Development, and Cross-Country Empirics

Recent literature contains many stories of how foreign aid affects economic growth. All the stories hinge on the statistical significance in cross-country regressions of a quadratic term involving

Aid, Policies, and Growth

The authors of this paper use a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth of per capita GDP. In panel growth regressions for 56

Does Foreign Aid Promote Democracy

Aid potentially can contribute to democratization in several ways: (1) through technical assistance focusing on electoral processes, the strengthening of legislatures and judiciaries as checks on

Politics and the Effectiveness of Foreign Aid

Aid and Growth: What Does the Cross-Country Evidence Really Show?

We examine the effects of aid on growth in cross-sectional and panel dataafter correcting for the possible bias that poorer (or stronger) growth may draw aid contributions to recipient countries.

Can Foreign Aid Buy Growth

The widely publicized finding that "aid promotes growth in a good policy environment" is not robust to the inclusion of new data or alternative definitions of "aid," "policy" or "growth." The idea
...