Publication

This paper simulates EU aid channeled through the European Development Fund (EDF) and the Development Cooperation Instrument (DCI) to developing countries. Simulations using the National Institute’s Global Econometric Model, NiGEM, are carried out and combined with findings from the empirical literature on the impact of aid to economic and social infrastructure on productivity and aid for trade on trade costs. The authors conclude that EU aid is an investment benefiting poor countries, the world generally, and the EU as a sender of aid in particular.