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S/E/227. Economic aid does not necessarily produce growth. Discuss.

WORDS:
4750
DATE:
2010
PRICE:
49.99 GBP

The paper analyses the increasingly complicated relationship between aid and growth. This is examined within 52 developing countries, by the use of the Ordinary Least Squares Model. The literature review presents what it considers to be “the most authoritative source” – Craig Burnside and David Dollar (1997) – which examines whether the impact of aid reflects a positive effect on growth. World Development Indicators (WDI) published by the World Bank are the paper's main source of data. Other significant variables are included in an attempt to understand how growth is created: trade, schooling, water access, inflation and migrated labour force. The paper comes to the conclusion that aid given to a country does not produce an accompanying burst of economic growth.

 

KEYWORDS: Economic aid, foreign aid, economic growth, Third World countries,

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