Publication

This paper examines the short term effect of aid on growth and focuses on aid that could stimulate growth in four years, including budget and balance of payments support, investments in infrastructure and aid for productive sectors such as agriculture and industry. The authors find a positive, causal relationship between this “short-impact” aid and economic growth over a four-year period in sub-Saharan Africa. The authors further conclude that the impact on growth is larger in countries with stronger institutions or longer life expectancies and also find a significant negative relationship between debt repayments and growth.