Publication:
Aid, Shocks, and Growth

dc.contributor.authorCollier, Paul
dc.contributor.authorDehn, Jan
dc.date.accessioned2014-08-20T19:18:12Z
dc.date.available2014-08-20T19:18:12Z
dc.date.issued2001-10
dc.description.abstractAnalysis 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.en
dc.identifierhttp://documents.worldbank.org/curated/en/2001/10/1614893/aid-shocks-growth
dc.identifier.doi10.1596/1813-9450-2688
dc.identifier.urihttps://hdl.handle.net/10986/19508
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2688
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectADVERSE EFFECTS
dc.subjectAID
dc.subjectAID ALLOCATION
dc.subjectAVERAGE CHANGE
dc.subjectCOMMODITY PRICES
dc.subjectDATA SET
dc.subjectDEPENDENT VARIABLE
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPMENT ASSISTANCE
dc.subjectDEVELOPMENT ECONOMICS
dc.subjectDEVELOPMENT ISSUES
dc.subjectDEVELOPMENT RESEARCH
dc.subjectECONOMETRIC ANALYSIS
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIC MODELS
dc.subjectECONOMIC REVIEW
dc.subjectECONOMIC STUDIES
dc.subjectEXPLANATORY VARIABLES
dc.subjectEXPORTS
dc.subjectFOREIGN AID
dc.subjectFOREIGN EXCHANGE
dc.subjectGROWTH EFFECT
dc.subjectGROWTH EPISODES
dc.subjectGROWTH PROCESS
dc.subjectGROWTH RATE
dc.subjectGROWTH REGRESSIONS
dc.subjectINCOME
dc.subjectINCOME MEAN
dc.subjectINCREASING GROWTH
dc.subjectINTERNATIONAL TRADE
dc.subjectMACROECONOMIC POLICY
dc.subjectMACROECONOMICS
dc.subjectNATIONAL INCOME
dc.subjectNEGATIVE SHOCK
dc.subjectNEGATIVE SHOCKS
dc.subjectNEGATIVE TERMS
dc.subjectOIL
dc.subjectPOLICY RESEARCH
dc.subjectPOSITIVE SHOCKS
dc.subjectPOVERTY REDUCTION
dc.subjectPRICE CHANGES
dc.subjectPRICE INDEX
dc.subjectPRICE INDICES
dc.subjectPRIVATE SECTOR
dc.subjectPRODUCERS
dc.subjectRECESSION
dc.subjectREDUCING POVERTY
dc.subjectSIGNIFICANT EFFECT
dc.subjectTARGETING
dc.subjectTAXATION
dc.subjectTERMS OF TRADE
dc.subjectUNEMPLOYMENT
dc.subjectPRICE STABILIZATION
dc.subjectTARGETED ASSISTANCE
dc.subjectECONOMIC SHOCKS
dc.subjectAID FLOWS
dc.titleAid, Shocks, and Growthen
dspace.entity.typePublication
okr.crosscuttingsolutionareaGender
okr.crossref.titleAid, Shocks, and Growth
okr.date.disclosure2001-10-31
okr.date.doiregistration2025-04-10T09:22:07.616385Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2001/10/1614893/aid-shocks-growth
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeEducation
okr.globalpracticeHealth, Nutrition, and Population
okr.globalpracticePoverty
okr.globalpracticeFinance and Markets
okr.guid756671468739500003
okr.identifier.doi10.1596/1813-9450-2688
okr.identifier.externaldocumentum000094946_01102304052049
okr.identifier.internaldocumentum1614893
okr.identifier.reportWPS2688
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2001/11/06/000094946_01102304052049/Rendered/PDF/multi0page.pdfen
okr.topicEnvironmental Economics and Policies
okr.topicEducation::School Health
okr.topicMacroeconomics and Economic Growth::Markets and Market Access
okr.topicDevelopment Economics and Aid Effectiveness
okr.topicPoverty Reduction::Inequality
okr.topicGender::Gender and Development
okr.unitOffice of the Director, Development Research Group
okr.volume1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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