Dollars, dialogue and development: an evaluation of Swedish program aid

How does aid affect recipient country economic performance? This study looks at programme aid (import support, budget support and debt relief) in nine countries (Bangladesh, Cape Verde, Ghana, Mozambique, Nicaragua, Tanzania, Uganda, Vietnam and Zambia), showing how aid has had an impact on both policy outcomes and macroeconomic aggregates such as investment and imports. The study is one of the few to look at how bilateral donors engage in policy conditionality, and the channels through which bilaterals seek to influence the policy of recipients. It also shows a way to analyse macroeconomic impact without resorting to flawed cross- country growth regressions.