This paper makes two main contributions. First, we examine the long-run effect of foreign aid on domestic output for 59 developing countries using heterogeneous panel cointegration techniques to control for omitted variable and endogeneity bias and to detect possible cross-country differences in...

This paper analyzes the effectiveness of debt relief and foreign aid in a neoclassical growth framework with a conflict of interest between the donor and the recipient government. Conditionality is modeled as a dynamic contract that is enforceable only by the threat of aid sanctions....

In this paper we investigate the effectiveness of development aid in recipient countries. Specifically, we analyze the relationship between per-capita income and foreign aid for a maximum of 131 recipient countries over the 1960 to 2006 period. We employ annual data and 5-year averages and,...