Are Aid Flows Excessive or Insufficient? Estimating the Growth Impact of Aid in Threshold Regressions

Sarantis C. Kalyvitis · Thanasis Stengos · Irene Vlachaki

11 citations0/0 files storedScottish Journal of Political Economy

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International Development and Aid Economic Growth and Productivity Natural Resources and Economic Development

Abstract

Abstract Existing empirical studies and policy reports provide ambiguous results on the growth effect of foreign aid flows in the recipient countries. The present paper examines whether there exists an aid threshold that determines the growth impact of foreign aid. We use a threshold regression methodology to estimate growth specifications and the associated aid thresholds in a sample of 42 aid recipients covering the period 1970–2000. Our findings indicate that there is a threshold level of aid, above which the growth impact of aid becomes positive.

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References

2001The Colonial Origins of Comparative Development: An Empirical Investigation 2012The Colonial Origins of Comparative Development: An Empirical Investigation: Reply 1997Africa's Growth Tragedy: Policies and Ethnic Divisions 1995INSTITUTIONS AND ECONOMIC PERFORMANCE: CROSS‐COUNTRY TESTS USING ALTERNATIVE INSTITUTIONAL MEASURES 1995Economic Reform and the Process of Global Integration n.d.Aid, Policies, and Growth 2000Sample Splitting and Threshold Estimation 1960The Stages of Economic Growth: A Non-Communist Manifesto.

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