The Solow Model, Poverty Traps, and the Foreign Aid Debate

Foreign Aid Fungibility, Growth, and Poverty Reduction

This paper tries to assess to which extent fungibility in sectoral foreign development assistance is something donors should be concerned about. This is done in three steps. First, country specific estimates of the degree of fungibility are obtained. These are then incorporated in a well established empirical aid-growth equation. Third, arguing that the aid-growth relation may not be the releva...

The Foreign Aid Effectiveness Debate: Evidence from Malawi

Working Paper 6 March 2015 Rajlakshmi De and Charles Becker Understanding the role of foreign aid in poverty alleviation is one of the central inquiries of development economics. To augment past cross-country studies, this paper offers a first step toward addressing the absence of disaggregated estimates of the allocation and impact of foreign aid. Newly geocoded aid project data from Malawi ar...

Taking the health aid debate to the subnational level: the impact and allocation of foreign health aid in Malawi

OBJECTIVE Cross-national studies provide inconclusive results as to the effectiveness of foreign health aid. We highlight a novel application of using subnational data to evaluate aid impacts, using Malawi as a case study. DESIGN We employ two rounds of nationally representative household surveys (2004/2005 and 2010/2011) and geo-referenced foreign aid data. We examine the determinants of Mal...

The Green Solow model

We argue that a key empirical finding in environmental economics—the Environmental Kuznets Curve (EKC)—and the core model of modern macroeconomics—the Solow model—are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. We explain why current methods for estimating an ...

The Evolving Debate on the Effect of Foreign Aid on Corruption and Institutions in Africa