Your development or mine? Effects of donor-recipient cultural differences on the aid-growth nexus

Anna Minasyan*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

10 Citations (Scopus)

Abstract

Development aid from the West may lead to adverse growth effects in the global South due to the neglected cultural differences between development aid (paradigm) providers and recipients. I test this hypothesis empirically by augmenting an aid-growth model with proxy variables for cultural differences between donors and recipients. First, I use donor-recipient genetic distance, i.e., blood types, to capture the traditional way of cultural transmission. Second, I use western education of recipient country leaders to capture resource-based transmission of culture. Results of the OLS panel estimation in first differences show that a one unit increase in donor-recipient genetic distance reduces the main effect of aid on growth by 0.2 percentage points when aid is increased by one percentage point. In turn, a one percentage point increase in aid yields on average a 0.3 percentage point increase in growth after a decade for countries with western educated leaders. Journal of Comparative Economics 44 (2) (2016) 309-325. Georg-August University of Goettingen, Platz der Goettinger Sieben 5, MZG Room 8.147, 37073 Goettingen, Germany. (C) 2015 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.

Original languageEnglish
Pages (from-to)309-325
Number of pages17
JournalJournal of Comparative Economics
Volume44
Issue number2
DOIs
Publication statusPublished - May-2016
Externally publishedYes

Keywords

  • Aid effectiveness
  • Cultural differences
  • Genetic distance
  • Western education
  • TRANSMISSION
  • EDUCATION

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