P4: Official capital flows (aid)

PIs: Dreher (leading), Gassebner, Menkhoff

The literature on the effects of development aid is substantial. Plenty of research has been done on whether or not aid increases economic growth - on average, and depending on the recipients' institutions, policies, and commercial as well as political connections to the major donors. Similar studies focus on the impact of aid on institutional quality, economic policies, investment, and consumption. In this project we suggest to complement previous work by looking at the impact of aid on individuals, rather than on macroeconomic outcomes. We intend to combine data from the World Values Survey (for about 80,000 individuals), survey data from various countries and similar sources with macroeconomic data like aid and corruption. Conducting multi-level analyses for about 70 countries over the last 20 years, we intend to answer a rich set of questions related to the consequences of aid at the individual level. We further intend to complete recent aid effectiveness literature on regional rather than country-level analyses. Geo-coded data for 11 years exists for the World Bank for the whole world, for China in Africa, and the African Development Bank. We intend to contribute to this area by geo-coding aid flows for additional donors and years.

Possible dissertation topics:

  • How does aid affect access to credit for households and firms in developing countries?
  • The impact of aid on investment choices and consumption smoothing
  • How does development aid affect people?s life (rather than aggregate economic growth)?
  • The impact of food aid on (potential) recipients? behavior
  • The effects of aid at the regional level (creating geo-coded data for additional donors/ years and relating them to outcomes other than growth)