Theoretical predictions and empirical evidence on the impact of foreign aid and fiscal policy on growth are mixed. This paper examines the effect of fiscal variables (government expenditure and revenue) and aid on growth using annual time series data for Kenya over the period 1964 – 2002. Multivariate cointegration (VAR) and vector error correction models (VECM) are estimated to establish both ...

Foreign aid has often been intended by donors to entice recipient nations into policy and institutional reforms favorable to private sector economic development. In this study, we investigate the relationship between aid and changes to economic freedom in recipient nations over the 1990–2000 decade. The evidence is mixed. In general, we find that foreign aid has no significant effect on economi...

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...