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Foreign aid and business bottlenecks : a study of aid effectiveness, Volume 1
Author:Ferro, Esteban; Wilson, John S.; Country:World;
Date Stored:2011/01/24Document Date:2011/01/01
Document Type:Policy Research Working PaperSubTopics:Environmental Economics & Policies; Gender and Health; School Health; Disability; Development Economics & Aid Effectiveness
Language:EnglishMajor Sector:Industry and trade
Rel. Proj ID:1W-Transparency And Regulatory Reform In The Asia Pacific Region -- -- P106110;Region:The World Region
Report Number:WPS5546Sub Sectors:Other domestic and international trade
Collection Title:Policy Research working paper ; no. WPS 5546TF No/Name:TF090173-TC- Global Trade Financial Architecture; TF094728-TRANSPARENCY, TRADE, AND ECONOMIC GROWTH
Volume No:1  

Summary: This paper proposes a new framework to analyze aid effectiveness. Using World Bank firm survey data and OECD aid flow data, the authors analyze whether aid targets areas that firms in developing countries have identified as obstacles for their growth and whether aid actually improves firms' perceptions of those areas. The analysis finds that aid does target the areas that firms have identified as obstacles; aid funding trade related projects is particularly effective in targeting the correct countries. For the most part, aid has a positive impact on improving firms' perceptions, particularly in the business environment. And for each target area, smaller aid disbursements tend to be more effective at improving firm perceptions than larger disbursements.

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