Working Paper: NBER ID: w20685
Authors: Sebastian Edwards
Abstract: In this paper I discuss the effectiveness of foreign aid from a historical perspective. I show that foreign aid is a relatively new concept in economics, and I emphasize the role of exchange rate policies in the foreign aid controversies of the 1970s through 1990s. I show that in the early 1980s there were major changes in views regarding aid and agriculture. I emphasize the role of “ownership” of aid programs by the recipient countries as a way of increasing effectiveness. I argue that there is little hope of making progress in these debates if the economics profession continues to rely, almost exclusively, on cross section regressions. In order to move forward, these analyses need to be supplemented by in depth case studies that follow a country’s history for many decades.
Keywords: No keywords provided
JEL Codes: B20; F31; F62; O10; O13; O19; O40; O43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Ownership of aid programs by recipient countries (F35) | Increased effectiveness of aid (F35) |
| Exchange rate policies (F31) | Effectiveness of aid (F35) |
| Exchange rate policies (F31) | Barriers to success of aid programs (F35) |