Aid, Shocks, and Growth
Analysis of the relationship between aid and growth by Burnside and Dollar found that the better a country's policies, the more effective aid is in raising growth in that country. But this result has been criticized for being sensitive to choice of sample and for neglecting shocks. The authors incorporate export price shocks into the analysis of aid's effect on growth. They construct export price indices using the approach pioneered by Deaton and Miller. They locate shocks by differencing the indices, removing predictable elements from the stationary process, and normalizing the residuals. Extreme negative shocks are the bottom 2.5 percent tail of this distribution. Introducing these extreme shocks into the Burnside-Dollar regression, the authors find that they are highly significant: unsurprisingly, extreme negative shocks reduce growth. Once these shocks are included, the Burnside-Dollar results become robust to choice of sample. Moreover, the adverse effects of negative shocks on growth can be mitigated through offsetting increases in aid. Indeed, targeting aid to countries experiencing negative shocks appears to be even more important for aid effectiveness than targeting aid to countries with good policies. But the authors show that, overall, donors have not used aid for this purpose.
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dig-okr-10986195082024-08-08T17:59:15Z Aid, Shocks, and Growth Collier, Paul Dehn, Jan ADVERSE EFFECTS AID AID ALLOCATION AVERAGE CHANGE COMMODITY PRICES DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DEVELOPMENT ECONOMICS DEVELOPMENT ISSUES DEVELOPMENT RESEARCH ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC STUDIES EXPLANATORY VARIABLES EXPORTS FOREIGN AID FOREIGN EXCHANGE GROWTH EFFECT GROWTH EPISODES GROWTH PROCESS GROWTH RATE GROWTH REGRESSIONS INCOME INCOME MEAN INCREASING GROWTH INTERNATIONAL TRADE MACROECONOMIC POLICY MACROECONOMICS NATIONAL INCOME NEGATIVE SHOCK NEGATIVE SHOCKS NEGATIVE TERMS OIL POLICY RESEARCH POSITIVE SHOCKS POVERTY REDUCTION PRICE CHANGES PRICE INDEX PRICE INDICES PRIVATE SECTOR PRODUCERS RECESSION REDUCING POVERTY SIGNIFICANT EFFECT TARGETING TAXATION TERMS OF TRADE UNEMPLOYMENT PRICE STABILIZATION TARGETED ASSISTANCE ECONOMIC SHOCKS AID FLOWS Analysis of the relationship between aid and growth by Burnside and Dollar found that the better a country's policies, the more effective aid is in raising growth in that country. But this result has been criticized for being sensitive to choice of sample and for neglecting shocks. The authors incorporate export price shocks into the analysis of aid's effect on growth. They construct export price indices using the approach pioneered by Deaton and Miller. They locate shocks by differencing the indices, removing predictable elements from the stationary process, and normalizing the residuals. Extreme negative shocks are the bottom 2.5 percent tail of this distribution. Introducing these extreme shocks into the Burnside-Dollar regression, the authors find that they are highly significant: unsurprisingly, extreme negative shocks reduce growth. Once these shocks are included, the Burnside-Dollar results become robust to choice of sample. Moreover, the adverse effects of negative shocks on growth can be mitigated through offsetting increases in aid. Indeed, targeting aid to countries experiencing negative shocks appears to be even more important for aid effectiveness than targeting aid to countries with good policies. But the authors show that, overall, donors have not used aid for this purpose. 2014-08-20T19:18:12Z 2014-08-20T19:18:12Z 2001-10 http://documents.worldbank.org/curated/en/2001/10/1614893/aid-shocks-growth https://hdl.handle.net/10986/19508 English en_US Policy Research Working Paper;No. 2688 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ application/pdf text/plain World Bank, Washington, DC |
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Banco Mundial |
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Estados Unidos |
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US |
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Bibliográfico |
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En linea |
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dig-okr |
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biblioteca |
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America del Norte |
| libraryname |
Biblioteca del Banco Mundial |
| language |
English en_US |
| topic |
ADVERSE EFFECTS AID AID ALLOCATION AVERAGE CHANGE COMMODITY PRICES DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DEVELOPMENT ECONOMICS DEVELOPMENT ISSUES DEVELOPMENT RESEARCH ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC STUDIES EXPLANATORY VARIABLES EXPORTS FOREIGN AID FOREIGN EXCHANGE GROWTH EFFECT GROWTH EPISODES GROWTH PROCESS GROWTH RATE GROWTH REGRESSIONS INCOME INCOME MEAN INCREASING GROWTH INTERNATIONAL TRADE MACROECONOMIC POLICY MACROECONOMICS NATIONAL INCOME NEGATIVE SHOCK NEGATIVE SHOCKS NEGATIVE TERMS OIL POLICY RESEARCH POSITIVE SHOCKS POVERTY REDUCTION PRICE CHANGES PRICE INDEX PRICE INDICES PRIVATE SECTOR PRODUCERS RECESSION REDUCING POVERTY SIGNIFICANT EFFECT TARGETING TAXATION TERMS OF TRADE UNEMPLOYMENT PRICE STABILIZATION TARGETED ASSISTANCE ECONOMIC SHOCKS AID FLOWS ADVERSE EFFECTS AID AID ALLOCATION AVERAGE CHANGE COMMODITY PRICES DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DEVELOPMENT ECONOMICS DEVELOPMENT ISSUES DEVELOPMENT RESEARCH ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC STUDIES EXPLANATORY VARIABLES EXPORTS FOREIGN AID FOREIGN EXCHANGE GROWTH EFFECT GROWTH EPISODES GROWTH PROCESS GROWTH RATE GROWTH REGRESSIONS INCOME INCOME MEAN INCREASING GROWTH INTERNATIONAL TRADE MACROECONOMIC POLICY MACROECONOMICS NATIONAL INCOME NEGATIVE SHOCK NEGATIVE SHOCKS NEGATIVE TERMS OIL POLICY RESEARCH POSITIVE SHOCKS POVERTY REDUCTION PRICE CHANGES PRICE INDEX PRICE INDICES PRIVATE SECTOR PRODUCERS RECESSION REDUCING POVERTY SIGNIFICANT EFFECT TARGETING TAXATION TERMS OF TRADE UNEMPLOYMENT PRICE STABILIZATION TARGETED ASSISTANCE ECONOMIC SHOCKS AID FLOWS |
| spellingShingle |
ADVERSE EFFECTS AID AID ALLOCATION AVERAGE CHANGE COMMODITY PRICES DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DEVELOPMENT ECONOMICS DEVELOPMENT ISSUES DEVELOPMENT RESEARCH ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC STUDIES EXPLANATORY VARIABLES EXPORTS FOREIGN AID FOREIGN EXCHANGE GROWTH EFFECT GROWTH EPISODES GROWTH PROCESS GROWTH RATE GROWTH REGRESSIONS INCOME INCOME MEAN INCREASING GROWTH INTERNATIONAL TRADE MACROECONOMIC POLICY MACROECONOMICS NATIONAL INCOME NEGATIVE SHOCK NEGATIVE SHOCKS NEGATIVE TERMS OIL POLICY RESEARCH POSITIVE SHOCKS POVERTY REDUCTION PRICE CHANGES PRICE INDEX PRICE INDICES PRIVATE SECTOR PRODUCERS RECESSION REDUCING POVERTY SIGNIFICANT EFFECT TARGETING TAXATION TERMS OF TRADE UNEMPLOYMENT PRICE STABILIZATION TARGETED ASSISTANCE ECONOMIC SHOCKS AID FLOWS ADVERSE EFFECTS AID AID ALLOCATION AVERAGE CHANGE COMMODITY PRICES DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DEVELOPMENT ECONOMICS DEVELOPMENT ISSUES DEVELOPMENT RESEARCH ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC STUDIES EXPLANATORY VARIABLES EXPORTS FOREIGN AID FOREIGN EXCHANGE GROWTH EFFECT GROWTH EPISODES GROWTH PROCESS GROWTH RATE GROWTH REGRESSIONS INCOME INCOME MEAN INCREASING GROWTH INTERNATIONAL TRADE MACROECONOMIC POLICY MACROECONOMICS NATIONAL INCOME NEGATIVE SHOCK NEGATIVE SHOCKS NEGATIVE TERMS OIL POLICY RESEARCH POSITIVE SHOCKS POVERTY REDUCTION PRICE CHANGES PRICE INDEX PRICE INDICES PRIVATE SECTOR PRODUCERS RECESSION REDUCING POVERTY SIGNIFICANT EFFECT TARGETING TAXATION TERMS OF TRADE UNEMPLOYMENT PRICE STABILIZATION TARGETED ASSISTANCE ECONOMIC SHOCKS AID FLOWS Collier, Paul Dehn, Jan Aid, Shocks, and Growth |
| description |
Analysis of the relationship between aid
and growth by Burnside and Dollar found that the better a
country's policies, the more effective aid is in
raising growth in that country. But this result has been
criticized for being sensitive to choice of sample and for
neglecting shocks. The authors incorporate export price
shocks into the analysis of aid's effect on growth.
They construct export price indices using the approach
pioneered by Deaton and Miller. They locate shocks by
differencing the indices, removing predictable elements from
the stationary process, and normalizing the residuals.
Extreme negative shocks are the bottom 2.5 percent tail of
this distribution. Introducing these extreme shocks into the
Burnside-Dollar regression, the authors find that they are
highly significant: unsurprisingly, extreme negative shocks
reduce growth. Once these shocks are included, the
Burnside-Dollar results become robust to choice of sample.
Moreover, the adverse effects of negative shocks on growth
can be mitigated through offsetting increases in aid.
Indeed, targeting aid to countries experiencing negative
shocks appears to be even more important for aid
effectiveness than targeting aid to countries with good
policies. But the authors show that, overall, donors have
not used aid for this purpose. |
| topic_facet |
ADVERSE EFFECTS AID AID ALLOCATION AVERAGE CHANGE COMMODITY PRICES DATA SET DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT ASSISTANCE DEVELOPMENT ECONOMICS DEVELOPMENT ISSUES DEVELOPMENT RESEARCH ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC REVIEW ECONOMIC STUDIES EXPLANATORY VARIABLES EXPORTS FOREIGN AID FOREIGN EXCHANGE GROWTH EFFECT GROWTH EPISODES GROWTH PROCESS GROWTH RATE GROWTH REGRESSIONS INCOME INCOME MEAN INCREASING GROWTH INTERNATIONAL TRADE MACROECONOMIC POLICY MACROECONOMICS NATIONAL INCOME NEGATIVE SHOCK NEGATIVE SHOCKS NEGATIVE TERMS OIL POLICY RESEARCH POSITIVE SHOCKS POVERTY REDUCTION PRICE CHANGES PRICE INDEX PRICE INDICES PRIVATE SECTOR PRODUCERS RECESSION REDUCING POVERTY SIGNIFICANT EFFECT TARGETING TAXATION TERMS OF TRADE UNEMPLOYMENT PRICE STABILIZATION TARGETED ASSISTANCE ECONOMIC SHOCKS AID FLOWS |
| author |
Collier, Paul Dehn, Jan |
| author_facet |
Collier, Paul Dehn, Jan |
| author_sort |
Collier, Paul |
| title |
Aid, Shocks, and Growth |
| title_short |
Aid, Shocks, and Growth |
| title_full |
Aid, Shocks, and Growth |
| title_fullStr |
Aid, Shocks, and Growth |
| title_full_unstemmed |
Aid, Shocks, and Growth |
| title_sort |
aid, shocks, and growth |
| publisher |
World Bank, Washington, DC |
| publishDate |
2001-10 |
| url |
http://documents.worldbank.org/curated/en/2001/10/1614893/aid-shocks-growth https://hdl.handle.net/10986/19508 |
| work_keys_str_mv |
AT collierpaul aidshocksandgrowth AT dehnjan aidshocksandgrowth |
| _version_ |
1807160284605841408 |