Research Summary: Aid and Growth at the Regional Level

Date Published

May 6, 2015

Authors

Tanya Sethi

Publisher

Citation

Dreher, Axel and Steffen Lohmann. 2015. Aid and Growth at the Regional Level. AidData Working Paper #9. Williamsburg, VA: AidData at William & Mary. 

Update: A revised version of the paper this research summary covers has been published in the Oxford Review of Economic Policy.

Research Summary: Aid and Growth at the Regional Level

Date Published

May 6, 2015

Authors

Tanya Sethi

Citation

Dreher, Axel and Steffen Lohmann. 2015. Aid and Growth at the Regional Level. AidData Working Paper #9. Williamsburg, VA: AidData at William & Mary. 

Standard country-level estimates of economic growth could obscure or miss the impacts of many aid projects experienced by a subset of regions or communities within a country. One way to examine whether the focus on country- rather than regional-level outcomes also explains the absence of robust effects of aid on growth in the empirical literature is to analyze aid effectiveness at the sub-national level. Using project-level data on World Bank aid in 130 countries during 2000-11, the study finds no evidence that this aid causes regional growth as measured by growth in nighttime light intensity.

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