Finally a breakthrough? The recent rise in the size of the estimates of aid effectiveness

The authors have previously surveyed the AEL, aid (empirical) effectiveness literature, using the technique of meta-analysis. We reached the result that the small positive effect of aid on growth found in the average study is mostly a publication selection bias. This present study concentrates on the new literature from 2007 onward which is divided into: Period (A) 2007-08: where the AEL showed aid ineffectiveness. Period (B) 2009-12: where the results are better. Three hypotheses may explain the upward kink in the results: (i) Aid effectiveness has increased. (ii) A breakthrough has occurred in the models and estimators. (iii) The improvement is an artifact. Unfortunately the data support the third hypothesis only.