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Aid effect on economic growth

A new academic article (and free) sheds light into the effects of development aid on economic growth using a quasi-experiment. This is no minor issue, for decades economists have been discussing what is really the impact of aid on the poor. First, we have a problem of how to measure growth and aid, second how to isolate effects, the counterfactual problem, a third problem is why should aid be measured as one factor? micro-lending might not work, but mosquito nets might do. Randomised trials on development have this humble approach, while macro analysis are too broad to be meaningful, micro empirical studies on the field can provide small solution for specific located issues.

Still, the initial question is interesting, has aid done any good at all? The authors say:

"The literature on aid and growth has not found a convincing instrumental variable to identify the
causal effects of aid. This paper exploits an instrumental variable based on the fact that since
1987, eligibility for a…

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