Aid and growth: a debatable connexion

After 50 years of economic research it is still debatable whether international
aid has favoured the peace of growth of developing countries. The question of
the effectiveness of aid has tried to be solved through an empirical process, in
which the economic theory contributes different growth models that “guide”
the specification of the empirical relations to be estimated. The analysis of the
macroeconomic impact of aid falls within the broader debate on the forces that
boost growth, understanding that aid may contribute –among other factors– to
the economic progress of the developing world. Nevertheless, given that none
of the proposed theories of growth perfectly explains the process of economic
growth, the theoretical basis of the aid-growth connexion is still “debatable”.
This paper shall review the aid effectiveness literature, focusing on the main
progresses achieved in the theoretical framework and in the econometrical
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