The Political Economy of Foreign Aid Effectiveness

Thursday 12 May 2016, 1.00PM to 2.00pm

Speaker(s): Ieva Skarda

Abstract: When a foreign aid donor gives money to help the masses in a country characterized by an economic contest between the rent-seeking elite and economically active masses, aid is more effective when there is a lower level of economic inequality. This finding is supported by empirical evidence: increasing aid/GDP ratio by one standard deviation boosts percentage growth rate by 0.24 points among the most equal foreign aid recipients and detracts percentage growth rate by 2.16 points among the least equal aid recipients. Similarly, foreign aid helps to tackle inequality in the most equal recipients.

Location: Economics Staff Room - A/EC202

Admission: Staff and PhD Students