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Fall 2006

ISSN 0890-913X

Volume 22, Number 1

Categories: Economics | Fall 2006

Does Development Aid Lead to Economic Freedom?

Benjamin Powell, Texas Tech University

Matt E. Ryan , Duquesne University

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JournalofPrivateEnterpiise,VolumeXXII,Number1,Fall2006DoesDevelopmentAidLeadtoEconomicFreedom?BenjaminPowellSanJoseStateUniversityMattE.Rya&SanJoseStateUniversityFormorethan50yearsindividualcountriesandinternationalagencieshavegivenaidtothirdworldcountriestopromoteeconomicdevelopment,yetpovertystillpersistsinmanyrecipientnations.Inrecentyearsdevelopmenteconomistsandagencieshaveincreasinglyrecognizedtheimportanceofinstitutionsthatsupportpropertyrightsandeconomicfreedominpromotingdevelopment.Nevertheless,nationscontinuetoprovideaidtolessdevelopedcountries.Thisraisestwoimportantquestions.Doesthereceiptofaidleadtoincreasesordecreasesineconomicfreedom,andareincreasesineconomicfreedomrewardedwithmoreaidorpunishedwithreducedaid?Thefailureofaidtodirectlypromotedevelopmentinimpoverishedcountriesiswelldocumented.Boone(1996),Vasquez(1998),EasterlyandLevine(2001),andOvaska(2003)allfindthatdevelopmentaidfailstosystematicallyimprovegrowthrates.Easterly(2001)summarizesWorldBankaidpoliciesthathavefailedtopromotedevelopment.Althoughaidhasgenerallyfailedtopromotedevelopment,BurnsideandDollar(2000)arguethataidcanbeeffectiveifthecorrectpolicyenvironmentisinplace.ThisleadsustoexamineWethankScottBeaulier,ChristopherCoyne,BobLawson,PeterLeeson,TomMeans,EdwardStringham,RobertSubrick,AlexTabarrok,ananonymousreferee,andtheparticipantsatthe2005AssociationofPrivateEnterpriseconferenceforhelpfulcommentsonearlierdrafts.Theusualdisclaimerapplies.BenjaminPowellandMattE.Ryan1

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Metadata [hide]

Title	Does Development Aid Lead to Economic Freedom?
Authors/Creators:	Benjamin Powell, Texas Tech University Matt E. Ryan , Duquesne University
Year:	2006
Volume:	22
Number:	1
Pages:	1 - 21
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	International Aid, Economic development, Economic freedom, Government policy

Citation:
Powell, Benjamin; Ryan, Matt E. / 2006. "Does Development Aid Lead to Economic Freedom?." The Journal of Private Enterprise, 22(1): 1-21.