MACRO ECONOMIC EFFECTS OF FOREIGN AID*

Foreign Aid, Political Instability, and Economic Growth

Relying on a simple endogenous growth model, this paper highlights a political instability effect as a potential explanation for why foreign aid is frequently ineffective with respect to economic performance. In the present framework, the role of the state is to fund institutions allowing for ongoing technology adoption and hence long-run growth. However, providing a self-interested government ...

Foreign aid and economic development in postwar

This paper shows that foreign aid in postwar Lebanon passed through two phases with distinct features that have had far reaching implications for postwar development. In the first phase lasting from 1992-97, foreign aid was mainly channelled towards providing resources for postwar reconstruction projects. The second phase from 1997 to the present witnessed a qualitative shift in foreign aid uti...

What Type of Economic Growth Does Foreign Aid Support?

The consensus of the aid effectiveness literature is that foreign aid is effective at spurring economic growth in recipient countries. However, economic growth is heterogeneous in nature, driven by a number of different activities within an economy. This paper contributes to the literature by disaggregating the Gross Domestic Product of recipients in order to investigate the type of economic gr...

Economic Growth and the Volatility of Foreign Aid

Foreign Aid and Economic Development in Postwar Lebanon

This paper shows that foreign aid in postwar Lebanon passed through two phases with distinct features that have had far reaching implications for postwar development. In the first phase lasting from 1992-97, foreign aid was mainly channelled towards providing resources for postwar reconstruction projects. The second phase from 1997 to the present witnessed a qualitative shift in foreign aid uti...