1. Aid and Growth in Fragile States
- Author:
- Mark McGillivray and Simon Feeny
- Publication Date:
- 01-2008
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- For many decades the research literature on the country-level impacts of aid sent mixed messages as to whether aid was effective in promoting economic growth. Some empirical studies found evidence of a positive association between aid and recipient country growth (Papanek 1973; Dowling and Hiemenz 1982; Gupta and Islam 1983; Levy 1987, 1988). Other empirical studies either failed to find any association or if they did, found that it was negative (Rahman 1968; Griffin 1970; Gupta 1970; Weisskopf 1972; Voivodas 1973; Mosley 1980; Mosley et al. 1987; and Boone 1996). The second group of studies had support from non-empirical research, with many influential writers providing damning critiques of aid, from both left and right wing perspectives (Friedman 1970; Hayter 1971; Hensma n 1971; Bauer 1981, 1991; and Hancock 1989, among many other writers). The lack of a consensus regarding the country-level impact of aid combined with strong evidence that aid projects were in general effective in attaining their intended outcomes, was described as the 'micro-macro paradox' of aid (Mosley 1986). This paradox was widely accepted in the aid policy and research circles.