Aid, Policies, and Growth: Reply

Aid, Policies and Growth

Views expressed are those of the authors and do not necessarily represent official opinions of the World Bank. Abstract This paper uses 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 developing countries and six four-year periods (1970-93) the policies that have a large effect on g...

Aid, Policies, and Growth: Bauer Was Right

Although Bauer’s influence has been powerful, it has not been pervasive. There appear to be some in the economic development community on whom his message seems not to have made even a dent. A case in point is the much-acclaimed study by two World Bank economists, Craig Burnside and David Dollar (2000, henceforth BD). Relying on a panel data set of 56 countries over six 4-year periods (beginnin...

On Aid, Growth, and Good Policies

This paper provides a critical analysis of the growth regressions in Burnside and Dollar (2000). First, we analyze the relation between aid and government expenditure in a modified neoclassical growth model. We find that while good policies spur growth they may at the same time lead to decreasing effectiveness of foreign aid. Second, we show that the econometric results in Burnside and Dollar e...

Aid , Budgetary Policies , and the Macroeconomy : Growth , Inflation , and Welfare

This paper examines the macroeconomic effects of foreign aid transfers in a small open recipient economy. The focus, however, is not on the impact of foreign aid per se but rather on aid’s influence conditional upon the different budgetary financing policies under the discretion of the recipient government. We compare the effects of an aid transfer tied to investment in a public good from a pur...

Retirement Security and Tax Policies: A Reply