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dc.contributor.authorHerzer, Dierken_US
dc.contributor.authorMorrissey, Oliveren_US
dc.date.accessioned2010-09-13T15:07:50Z-
dc.date.available2010-09-13T15:07:50Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/39996-
dc.description.abstractThis paper makes two main contributions. First, we examine the long-run effect of foreign aid on domestic output for 59 developing countries using heterogeneous panel cointegration techniques to control for omitted variable and endogeneity bias and to detect possible cross-country differences in the output effect of aid. The main result is that aid has, on average, a negative long-run effect on output, but there are large differences across countries (in about a third of cases the effect is positive). Second, we use a general-to-specific variable selection approach to systematically search for country-specific factors explaining the cross-country differences in the estimated long-run effect of aid. In contrast to previous studies, we find that aid effectiveness does not depend primarily on factors such as the quality of economic policy, the share of a country's area that is in the tropics, the level of democracy or political stability. The results suggest that the cross-country heterogeneity in the output effect of aid can be explained mainly by cross-country differences in law and order, religious tensions and government size.en_US
dc.language.isoengen_US
dc.publisherVerein für Socialpolitik, Ausschuss für Entwicklungsländer Göttingenen_US
dc.relation.ispartofseriesProceedings of the German Development Economics Conference, Hannover 2010 1en_US
dc.subject.jelF35en_US
dc.subject.jelO11en_US
dc.subject.jelC23en_US
dc.subject.jelC52en_US
dc.subject.ddc330en_US
dc.subject.keywordForeign aiden_US
dc.subject.keywordDomestic outputen_US
dc.subject.keywordHeterogeneous panel cointegration techniquesen_US
dc.subject.keywordGeneral-to-specific approachen_US
dc.titleThe Long-Run Effect of Foreign Aid on Domestic Outputen_US
dc.typeConference Paperen_US
dc.identifier.ppn654353697-
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:gdec10:1-
Appears in Collections:Proceedings of the German Development Economics Conference, 2010 (Hannover)

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