Aid and growth: the role of HDI announcements

• Grant number: 10/20902-0
• Support Opportunities: Regular Research Grants
• Start date: April 01, 2011
• End date: March 31, 2013
• Field of knowledge: Applied Social Sciences - Economics - Growth, Fluctuations and Economic Planning
• Principal Investigator: Mauro Rodrigues Jr
• Grantee: Mauro Rodrigues Jr
• Host Institution: Faculdade de Economia, Administração e Contabilidade (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil

Abstract

Recent empirical research does not find robust effects of aid on growth. Because of possible endogeneity of aid, instrumental variables have been frequently used, but without a clear justification for the validity of the instruments chosen. Based on annual announcements of the Human Development Index, we propose a new set of instruments: the position of a country on the HDI ranking, and its classification according to the four categories of human development. (AU)