Editing Aid effectiveness (section)

=== Econometric Studies ===
Many econometric studies have attempted to establish broad conclusions about aid, using regression analysis on a panel of recipient countries (seeing if their differing amounts and timings of aid received could be correlated with development indicators). These have created a mixed picture on the average effectiveness of aid, but one in which pessimism in the late 20th century has seemed to yield to qualified optimism in the early 21st century.<ref>{{Cite journal|last1=Mahembe|first1=Edmore|last2=Odhiambo|first2=Nicholas M.|date=2019-01-01|editor-last=Read|editor-first=Robert|title=Foreign aid and poverty reduction: A review of international literature|journal=Cogent Social Sciences|language=en|volume=5|issue=1|pages=1625741|doi=10.1080/23311886.2019.1625741|issn=2331-1886|doi-access=free}}</ref> See the table in the sub-section on "Major econometric studies and their findings", below.

==== Challenges for measurement ====
It must be borne in mind that such econometric studies face many problems. One challenge for assessing the effectiveness of aid is that aid is intended to serve a variety of purposes: some of it is aimed primarily at poverty alleviation, some at economic growth, and some at other objectives such as better governance or reduction of social inequalities. Often it is not very clear what objectives are foremost, making it hard to measure results against intentions.<ref>{{cite journal|last=Barder|first=Owen|date=2009-04-21|title=What is Poverty Reduction?|url=http://www.cgdev.org/content/publications/detail/1421599|journal=CGD Working Papers|access-date=2010-06-02}}</ref> Roodman (2007), for instance, discovered that the results of seven previous econometric studies – including the very influential one by Burnside and Dollar (1997, 2000) – could not survive defining key terms in other plausible ways.<ref>{{cite journal|last=Roodman|first=David|year=2007|title=The Anarchy of Numbers: Aid, Development and Cross-Country Empirics|journal=The World Bank Economic Review|volume=21|issue=2|pages=255–277|doi=10.1093/wber/lhm004|hdl-access=free|s2cid=14359188|hdl=10.1093/wber/lhm004}}</ref> Moreover, different objectives have different implications for the time-scale in which results should be sought.<ref name=":0">{{Cite journal|last=Clemens MA|display-authors=etal|date=2011|title=Counting Chickens when they Hatch: Timing and the Effects of Aid on Growth|journal=The Economic Journal|volume=122|issue=561|pages=590–617|doi=10.1111/j.1468-0297.2011.02482.x|doi-access=free}}</ref> Varying sectors and modalities of aid have different effects, as do the contextual factors in recipient countries.<ref name=":1">{{Cite journal|last=Petrikova|first=Ivica|date=2015|title=Aid for food security: does it work?|url=https://researchportal.port.ac.uk/ws/files/3106941/Petrikova_2015_IJDI.pdf|journal=International Journal of Development Issues|volume=14|pages=41–59|doi=10.1108/IJDI-07-2014-0058}}</ref> However, increasingly sophisticated analyses have made progress in accounting for these complicated effects.<ref name=":0" /><ref name=":1" />

Econometric studies frequently show more pessimistic results than might be expected from the accumulation of successes reported by donor and implementing agencies in their projects and programs. Paul Mosley termed this the '''micro-macro paradox''' and offered three potential explanations: inaccurate measurement, fungibility, and "backwash" or negative side-effects of component aid projects.<ref>{{cite book|last=Mosley|first=Paul|url=https://archive.org/details/foreignaiditsdef0000mosl|title=Foreign Aid: Its Defense and Reform|publisher=University Press of Kentucky|year=1987|isbn=978-0-8131-1608-2|quote=Paul Mosley.|access-date=December 7, 2009|url-access=registration}}</ref> The micro-macro paradox has also been attributed to inadequate assessment practices. For example, conventional assessment techniques often over-emphasize inputs and outputs without taking sufficient account of societal impacts. The shortcomings of prevalent assessment practices have led to a gradual international trend towards more rigorous methods of impact assessment.<ref>{{cite journal|last=Faust|first=Jörg|year=2009|title=Reliable evidence of impact|url=http://www.inwent.org/ez/articles/084417/index.en.shtml|url-status=dead|journal=Development and Cooperation|volume=36|issue=1|pages=14–17|archive-url=https://web.archive.org/web/20100227005515/http://www.inwent.org/ez/articles/084417/index.en.shtml|archive-date=2010-02-27}}</ref>

==== Major econometric studies and their findings ====
The main findings of major econometric studies are summarized in the following table.
{{alternating rows table|class=wikitable}}
|+ Table of econometric studies on aid effectiveness
! Author/year<ref>Bibliographic reference to be given in a note</ref>
! Period
! Findings on aid effectiveness;
|-
|Mosley 1987<ref>{{Cite book|last=Mosley|first=Paul|url=https://www.worldcat.org/oclc/14240724|title=Foreign aid, its defense and reform|date=1987|publisher=University Press of Kentucky|isbn=0-8131-1608-2|location=Lexington, Ky.|oclc=14240724}}</ref>
|1960-1980
|Aid had no significant effect on economic growth. The reason seemed to be fungibility: aid likely released other resources for unproductive uses.
|-
|Boone 1996<ref>{{cite report|url=https://www.nber.org/system/files/working_papers/w5308/w5308.pdf|title=Politics and the effectiveness of foreign aid|last1=Boone|first1=Peter|date=1995|publisher=National Bureau of Economic Research|access-date=2021-02-19}}</ref><ref>A similar version was published as {{Cite journal|last=Boone|first=Peter|date=1996|title=Politics and the effectiveness of foreign aid|journal=European Economic Review|volume=40|issue=2 |pages=289–329|doi=10.1016/0014-2921(95)00127-1 |s2cid=154155908 |url=http://cep.lse.ac.uk/pubs/download/DP0272.pdf |via=Science Direct}}</ref>
| 1971-1990
| Aid had no clear effect on rates of [[infant mortality]] and [[primary education]].
|-
|Burnside and Dollar 1997,<ref>{{cite report|url=http://documents1.worldbank.org/curated/en/698901468739531893/pdf/multi-page.pdf|title=Aid, policies and growth|last1=Burnside|first1=Craig|last2=Dollar|first2=David|date=1997|publisher=World Bank|access-date=2021-02-20}}</ref> 2000<ref>{{Cite journal|last1=Burnside|first1=Craig|last2=Dollar|first2=David|date=September 2000|title=Aid, Policies, and Growth|url=https://www.aeaweb.org/articles?id=10.1257/aer.90.4.847|journal=American Economic Review|language=en|volume=90|issue=4|pages=847–868|doi=10.1257/aer.90.4.847|s2cid=14261087 |issn=0002-8282|url-access=subscription}}</ref>
|1970-1993
|Aid had a positive impact on growth in developing countries with good policies. But the overall effect of aid was unclear because donors did not especially target such countries.
|-
|Svensson 1999<ref>{{Cite journal|last=Svensson|first=J.|date=1999|title=Aid, Growth and Democracy|url=https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0343.00062|journal=Economics & Politics|language=en|volume=11|issue=3|pages=275–297|doi=10.1111/1468-0343.00062|issn=1468-0343|url-access=subscription}}</ref>
|1980s, 1990s
|Aid had a positive impact on growth in more democratic countries. But aid on average was not channeled to more democratic countries.
|-
| Arvin and Borillas 2002<ref>{{Cite journal|last1=Arvin|first1=B. Mak|last2=Barillas|first2=Francisco|date=2002-11-01|title=Foreign aid, poverty reduction, and democracy|url=https://doi.org/10.1080/00036840210136718|journal=Applied Economics|volume=34|issue=17|pages=2151–2156|doi=10.1080/00036840210136718|s2cid=154546476 |issn=0003-6846|url-access=subscription}}</ref>
|1975-1998
|Aid had no clear effect on [[Gross national income|GNP]] per capita.
|-
|Kosack 2003<ref>{{Cite journal|last=Kosack|first=Stephen|date=2003-01-01|title=Effective Aid: How Democracy Allows Development Aid to Improve the Quality of Life|url=https://www.sciencedirect.com/science/article/pii/S0305750X02001778|journal=World Development|language=en|volume=31|issue=1|pages=1–22|doi=10.1016/S0305-750X(02)00177-8|issn=0305-750X|url-access=subscription}}</ref>
|1974-1985
|Aid had no clear effect on average, but improved the quality of life when combined with democracy.
|-
|Dunning 2004 <ref>{{Cite journal|last=Dunning|first=Thad|date=2004|title=Conditioning the Effects of Aid: Cold War Politics, Donor Credibility, and Democracy in Africa|url=https://www.cambridge.org/core/journals/international-organization/article/abs/conditioning-the-effects-of-aid-cold-war-politics-donor-credibility-and-democracy-in-africa/08C903F1F4E5C33D0F7E50B6EB7EB8E9|journal=International Organization|language=en|volume=58|issue=2|pages=409–423|doi=10.1017/S0020818304582073|doi-broken-date=2 December 2024 |s2cid=154368924 |issn=1531-5088|url-access=subscription}}</ref>
|1975-1997
|In the first few years after the Cold War foreign aid produced a small positive effect on democracy in sub-Saharan African countries, unlike in the previous 15 years.
|-
|Easterly et al. 2004<ref>{{Cite journal|last1=Easterly|first1=William|last2=Levine|first2=Ross|last3=Roodman|first3=David|date=2004-05-01|title=Aid, Policies, and Growth: Comment|url=https://pubs.aeaweb.org/doi/10.1257/0002828041464560|journal=American Economic Review|language=en|volume=94|issue=3|pages=774–780|doi=10.1257/0002828041464560|issn=0002-8282|url-access=subscription}}</ref>
|1970-1997
|The finding of Burnside and Dollar (2000, see above) is not robust to different definitions of aid and good policy.
|-
| Mosley et al. 2004<ref>{{Cite journal|last1=Mosley|first1=Paul|last2=Hudson|first2=John|last3=Verschoor|first3=Arjan|date=2004-06-01|title=Aid, Poverty Reduction and the 'New Conditionality'|url=https://academic.oup.com/ej/article/114/496/F217/5089279|journal=The Economic Journal|language=en|volume=114|issue=496|pages=F217–F243|doi=10.1111/j.1468-0297.2004.00220.x|s2cid=55919902 |issn=0013-0133|url-access=subscription}}</ref>
|1980-2000
|Aid increased pro-poor public spending in low-income countries.
|-
|Rajan and Subramanian 2005 <ref>{{cite report|url=https://www.nber.org/system/files/working_papers/w11513/w11513.pdf|title=Aid and growth: What does the cross-country evidence really show?|last1=Rajan|first1=Raghuram G.|last2=Subramanian|first2=Arvind|date=2005|publisher=National Bureau of Economic Research|access-date=2021-02-23}}</ref>
|1960-2000
|There was on average no robust positive relationship between aid and growth.
|-
|Yontcheva and Masud 2005<ref>{{cite report|url=https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Does-Foreign-Aid-Reduce-Poverty-Empirical-Evidence-from-Nongovernmental-and-Bilateral-Aid-17973#:~:text=Empirical%20Evidence%20from%20Nongovernmental%20and%20Bilateral%20Aid,-Author%2FEditor%3A&text=Summary%3A,impact%20on%20human%20development%20indicators.&text=Our%20results%20show%20that%20NGO,effectively%20than%20official%20bilateral%20aid.|title=Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid|last1=Yontcheva|first1=Boriana|last2=Masud|first2=Nadia|date=2005|publisher=IMF|access-date=2021-02-19}}</ref>
|1990-2001
|Aid by [[Non-governmental organization|NGOs]] co-financed by the [[European Commission]] reduced infant mortality but bilateral aid generally did not.
|-
|Calderon et al. 2006<ref>{{cite report|url=https://publications.iadb.org/publications/english/document/Foreign-Aid-Income-Inequality-and-Poverty.pdf|title=Foreign aid, income inequality, and poverty|last1=Calderon|first1=Mark|last2=Chong|first2=Alberto|date=2006|publisher=Inter-American Development Bank|last3=Gradstein|access-date=2021-02-20}}</ref><ref>A similar version was published as {{Cite journal|last1=Chong|first1=Alberto|last2=Gradstein|first2=Mark|last3=Calderon|first3=Cecilia|date=2009-07-01|title=Can foreign aid reduce income inequality and poverty?|url=https://doi.org/10.1007/s11127-009-9412-4|journal=Public Choice|language=en|volume=140|issue=1|pages=59–84|doi=10.1007/s11127-009-9412-4|s2cid=154071767 |issn=1573-7101|url-access=subscription}}</ref>
|1971–2002
|Aid had no clear effect on poverty, inequality, economic growth or democratic institutions.
|-
|Mosley and Suleiman 2007<ref>{{Cite journal|last1=Mosley|first1=Paul|last2=Suleiman|first2=Abrar|date=2007|title=Aid, Agriculture and Poverty in Developing Countries|url=https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-9361.2006.00354.x|journal=Review of Development Economics|language=en|volume=11|issue=1|pages=139–158|doi=10.1111/j.1467-9361.2006.00354.x|s2cid=154905396 |issn=1467-9361}}</ref>
|1980-2002
|Aid most effectively reduced poverty when it supported public expenditures on agriculture, education and infrastructure.
|-
|Bahmani-Oskooee and Oyolola 2009<ref>{{Cite journal|last1=Bahmani-Oskooee|first1=Mohsen|last2=Oyolola|first2=Maharouf|date=2009-01-01|title=Poverty reduction and aid: cross-country evidence|url=https://doi.org/10.1108/01443330910965796|journal=International Journal of Sociology and Social Policy|volume=29|issue=5/6|pages=264–273|doi=10.1108/01443330910965796|issn=0144-333X|url-access=subscription}}</ref>
|1981-2002
|Aid was on average effective in reducing poverty.
|-
|Clemens et al. 2011<ref>{{Cite journal|last1=Clemens|first1=Michael A.|last2=Radelet|first2=Steven|last3=Bhavnani|first3=Rikhil R.|last4=Bazzi|first4=Samuel|date=2012-06-01|title=Counting Chickens when they Hatch: Timing and the Effects of Aid on Growth|journal=The Economic Journal|language=en|volume=122|issue=561|pages=590–617|doi=10.1111/j.1468-0297.2011.02482.x|issn=0013-0133|doi-access=free}}</ref>
|1970-2000
|Aid had a modest positive effect on economic growth.<ref>The study re-analyzed data from Boone (1996), Burnside and Dollar (2000), and Rajan and Subramanian (2008), treating time-lags differently.</ref>
|-
|Alvi and Senbeta 2012<ref>{{Cite journal|last1=Alvi|first1=Eskander|last2=Senbeta|first2=Aberra|date=2012|title=Does Foreign Aid Reduce Poverty?|url=https://onlinelibrary.wiley.com/doi/abs/10.1002/jid.1790|journal=Journal of International Development|language=en|volume=24|issue=8|pages=955–976|doi=10.1002/jid.1790|issn=1099-1328|url-access=subscription}}</ref>
|1981-2004
|Aid—especially multilateral aid—significantly reduced poverty.
|-
|Kaya et al. 2013<ref>{{Cite journal|last1=Kaya|first1=Ozgur|last2=Kaya|first2=Ilker|last3=Gunter|first3=Lewell|date=2013|title=Foreign Aid and the Quest for Poverty Reduction: Is Aid to Agriculture Effective?|url=https://onlinelibrary.wiley.com/doi/abs/10.1111/1477-9552.12023|journal=Journal of Agricultural Economics|language=en|volume=64|issue=3|pages=583–596|doi=10.1111/1477-9552.12023|issn=1477-9552}}</ref>
|1980-2003
|Aid to agriculture significantly reduced poverty.
|-
|Hirano and Otsubo 2014<ref>{{cite report|url=https://openknowledge.worldbank.org/handle/10986/19397|title=Aid Is Good for the Poor|last1=Hirano|first1=Yumeka|last2=Otsubo|first2=Shigero|date=2014|publisher=World Bank|access-date=2021-02-20}}</ref>
|1990s, 2000s
|Social aid directly benefitted the poorest in society, while economic aid increased the income of the poor through growth.
|-
|Nunn and Qian 2014<ref>{{Cite journal|last1=Nunn|first1=Nathan|last2=Qian|first2=Nancy|date=2014-06-01|title=US Food Aid and Civil Conflict|url=https://pubs.aeaweb.org/doi/10.1257/aer.104.6.1630|journal=American Economic Review|language=en|volume=104|issue=6|pages=1630–1666|doi=10.1257/aer.104.6.1630|s2cid=12935268 |issn=0002-8282}}</ref>
|1971-2006
|U.S. food aid increased the incidence and duration of civil conflicts, but had no robust effect on inter-state conflicts or the onset of civil conflicts.<ref>Nunn and Qian acknowledged that such aid might also have other, possibly beneficial, effects</ref>
|-
|Arndt et al 2015<ref>{{Cite journal|date=2015-05-01|title=Assessing Foreign Aid's Long-Run Contribution to Growth and Development|journal=World Development|language=en|volume=69|pages=6–18|doi=10.1016/j.worlddev.2013.12.016|issn=0305-750X|doi-access=free|last1=Arndt |first1=Channing |last2=Jones |first2=Sam |last3=Tarp |first3=Finn }}</ref>
|1970-2007
|Aid moderately stimulated growth, promoted structural change, improved social indicators, and reduced poverty.
|-
|Petrikova 2015
|1994-2011
|Aid had a small positive effect on food security
|-
|Janjua et al. 2018<ref>{{Cite journal|last1=Janjua|first1=Pervez Zamurrad|last2=Muhammad|first2=Malik|last3=Usman|first3=Muhammad|date=2018-06-01|title=Impact of Project and Programme Aid on Economic Growth: A Cross Country Analysis|url=http://www.thepdr.pk/pdr/index.php/pdr/article/view/2780|journal=The Pakistan Development Review|language=en-US|volume=57|issue=2|pages=145–174|doi=10.30541/v57i2pp.145-174|doi-broken-date=1 November 2024 |issn=0030-9729|doi-access=free|url-access=subscription}}</ref>
|1995-2009
|Project aid had a significant effect on economic growth. Programme aid had a significant effect on social development.
|-
|Abellán and Alonso 2022<ref>{{Cite journal|last1=Abellán|first1=Javier|last2=Alonso|first2=José Antonio|date=2022|title=Promoting global access to water and sanitation: A supply and demand perspective|url=https://www.researchgate.net/publication/358066020|journal=Water Resources and Economics|language=en|volume=38|issue=|pages=100194|doi=10.1016/j.wre.2022.100194|s2cid=246261266 |doi-access=|bibcode=2022WRE....3800194A }}</ref>
|1990-2015
|Aid had a positive effect on access to safe drinking water, this effect being especially important when consistent long-term investments are put into place.
|-
|}