Explaining Development Aid Allocation by Growth : A Meta Study

The empirical literature explaining the driving forces behind the flows of development aid consists of (at least) 166 studies. One factor that has been analyzed in 30 of these studies is growth in the recipient country. A priori the effect may as well be positive as negative. This is an interesting factor for two reasons: (1) It is relatively easy to interpret the results, and (2) it is an important piece in the picture which suggests aid ineffectiveness. The paper is a meta-analysis of the 211 growth-aid estimates found in the 30 empirical studies. Additionally, we present new evidence using a panel data for 147 countries for the period 1967-2004. The result from both the meta-analysis and the primary data analysis is that growth does generate aid, so the dominating sign is positive. This result is driven partly by the large development banks