Karuna Gomanee - Academia.edu (original) (raw)

Papers by Karuna Gomanee

Research paper thumbnail of Essays on aid, growth and welfare

Research paper thumbnail of Aid, investment and growth in sub-Saharan Africa

10th General Conference of EADI, …, 2002

This paper is a contribution to the literature on aid and growth. Despite an extensive empirical ... more This paper is a contribution to the literature on aid and growth. Despite an extensive empirical literature in this area, existing studies have failed to specify the mechanisms via which aid should affect growth. We identify investment as the most significant transmission mechanism. With the use of residual generated regressors, we achieve a measure of the total effect of aid on growth, accounting for the effect via investment. Pooled panel results for a sample of 25 sub Saharan African countries over the period 1970 to 1997 point to a significant positive effect of foreign aid on growth, ceteris paribus. On average, each one percentage point increase in the aid/GNP ratio contributes one-quarter of one percentage point to the growth rate. Africa's poor growth record should not therefore be attributed to aid ineffectiveness.

Research paper thumbnail of Changing the conditions for development aid: a new paradigm? Edited by NIELS HERMES and ROBERT LENSINK. (London, Frank Cass, 2001, pp. 160, �30 h/bk)

Journal of International Development, 2002

Research paper thumbnail of Aid, Pro-Poor Government Spending and Welfare

SSRN Electronic Journal, 2000

Our objective is to test the hypothesis that aid can improve the welfare of the poor. Part of thi... more Our objective is to test the hypothesis that aid can improve the welfare of the poor. Part of this effect is direct, if aid is targeted on the poor, and part is indirect, via the transmission channel of aid-financed public spending on social services -sanitation, education and health. This indirect part is represented in an index of pro-poor public expenditures (PPE). As comparative data on poverty levels are scarce, we use two indicators of the welfare of the poor, namely infant mortality and the Human Development Index (HDI). We use a residual generated regressor to obtain a coefficient on the aid variable that includes the indirect effects through public expenditure allocation induced by aid. Estimation is based on a pooled panel of 39 countries over the period 1980 to 1998. We obtain results in support of our hypothesis that 'pro-poor' public expenditure is associated with increased levels of welfare, and we find evidence that aid is associated with improved values of the welfare indicators because aid finances pro-poor spending. In this way, aid potentially benefits the poor.

Research paper thumbnail of Searching for Aid Threshold Effects

SSRN Electronic Journal, 2000

... by Karuna Gomanee, Sourafel Girma and Oliver Morrissey _____ ... No. 03/15 Searching for Aid ... more ... by Karuna Gomanee, Sourafel Girma and Oliver Morrissey _____ ... No. 03/15 Searching for Aid Threshold Effects by Karuna Gomanee, Sourafel Girma and Oliver Morrissey ...

Research paper thumbnail of Aid, Government Expenditure, and Aggregate Welfare

World Development, 2005

This paper tests the hypothesis that aid contributes to increasing aggregate welfare, measured by... more This paper tests the hypothesis that aid contributes to increasing aggregate welfare, measured by infant mortality and the Human Development Index (HDI), in recipient countries. Estimation is based on data for 104 countries over the period 1980-2000, and for subsamples of low-income and middle-income countries. Fixed effect estimates provide robust evidence that aid is associated with improved values of the welfare indicators, and this effect appears to be greater in low-income countries. Aid appears to increase welfare either directly or through the effect on growth, and there is no evidence that aid operates through public spending.

Research paper thumbnail of Aid, public spending and human welfare: evidence from quantile regressions

Journal of International Development, 2005

Does aid contribute to human development other than by increasing growth? In doing so, is aid mor... more Does aid contribute to human development other than by increasing growth? In doing so, is aid more or less effective in poorer countries (those with low levels of aggregate welfare)? This paper addresses these issues, assessing if there is cross-country aggregate evidence for an effect of aid on welfare levels. We posit that aid can enhance human development by financing public expenditures that increase welfare indicators. Using quantile regressions, we report evidence that aid is associated with higher human development (the Human Development Index) and lower infant mortality (both indicators of aggregate welfare). Where there are differences across quantiles, aid is more effective in countries below the median of the welfare distribution, i.e. with lower levels of human development. Insofar as aggregate welfare is (inversely) correlated with poverty, we find evidence that aid can make a positive contribution to alleviating poverty, and that the effect appears to be greater in countries with lower levels of human development indicators.

Research paper thumbnail of Aid and growth in Sub-Saharan Africa: accounting for transmission mechanisms

Journal of International Development, 2005

This paper is a contribution to the literature on aid and growth. Despite an extensive existing e... more This paper is a contribution to the literature on aid and growth. Despite an extensive existing empirical literature in this area, studies have not paid much attention to the importance of transmission mechanisms in determining the influence of aid inflows on growth rates. In other words, existing studies have failed to specify the mechanisms via which aid should affect growth. We identify investment as the most significant transmission mechanism, and also consider effects of aid via government spending and imports. With the use of residual generated regressors, we achieve a measure of total effect of aid on growth, accounting for the effect via investment. Pooled panel results for a sample of sub Saharan African countries over the period 1970 to 1997 point to a highly significant positive effect of foreign aid on growth. On average, each one percentage point increase in the aid/GNP ratio adds one-third of one percentage point to the growth rate. The results are robust to issues of endogeneity, outliers and country-specific effects. Africa's poor growth record should not therefore be attributed to aid ineffectiveness.

Research paper thumbnail of Evaluating aid effectiveness against a poverty-reduction criterion

Our objective is to test the hypothesis that aid can improve the welfare of the poor.

Research paper thumbnail of Essays on aid, growth and welfare

Research paper thumbnail of Aid, investment and growth in sub-Saharan Africa

10th General Conference of EADI, …, 2002

This paper is a contribution to the literature on aid and growth. Despite an extensive empirical ... more This paper is a contribution to the literature on aid and growth. Despite an extensive empirical literature in this area, existing studies have failed to specify the mechanisms via which aid should affect growth. We identify investment as the most significant transmission mechanism. With the use of residual generated regressors, we achieve a measure of the total effect of aid on growth, accounting for the effect via investment. Pooled panel results for a sample of 25 sub Saharan African countries over the period 1970 to 1997 point to a significant positive effect of foreign aid on growth, ceteris paribus. On average, each one percentage point increase in the aid/GNP ratio contributes one-quarter of one percentage point to the growth rate. Africa's poor growth record should not therefore be attributed to aid ineffectiveness.

Research paper thumbnail of Changing the conditions for development aid: a new paradigm? Edited by NIELS HERMES and ROBERT LENSINK. (London, Frank Cass, 2001, pp. 160, �30 h/bk)

Journal of International Development, 2002

Research paper thumbnail of Aid, Pro-Poor Government Spending and Welfare

SSRN Electronic Journal, 2000

Our objective is to test the hypothesis that aid can improve the welfare of the poor. Part of thi... more Our objective is to test the hypothesis that aid can improve the welfare of the poor. Part of this effect is direct, if aid is targeted on the poor, and part is indirect, via the transmission channel of aid-financed public spending on social services -sanitation, education and health. This indirect part is represented in an index of pro-poor public expenditures (PPE). As comparative data on poverty levels are scarce, we use two indicators of the welfare of the poor, namely infant mortality and the Human Development Index (HDI). We use a residual generated regressor to obtain a coefficient on the aid variable that includes the indirect effects through public expenditure allocation induced by aid. Estimation is based on a pooled panel of 39 countries over the period 1980 to 1998. We obtain results in support of our hypothesis that 'pro-poor' public expenditure is associated with increased levels of welfare, and we find evidence that aid is associated with improved values of the welfare indicators because aid finances pro-poor spending. In this way, aid potentially benefits the poor.

Research paper thumbnail of Searching for Aid Threshold Effects

SSRN Electronic Journal, 2000

... by Karuna Gomanee, Sourafel Girma and Oliver Morrissey _____ ... No. 03/15 Searching for Aid ... more ... by Karuna Gomanee, Sourafel Girma and Oliver Morrissey _____ ... No. 03/15 Searching for Aid Threshold Effects by Karuna Gomanee, Sourafel Girma and Oliver Morrissey ...

Research paper thumbnail of Aid, Government Expenditure, and Aggregate Welfare

World Development, 2005

This paper tests the hypothesis that aid contributes to increasing aggregate welfare, measured by... more This paper tests the hypothesis that aid contributes to increasing aggregate welfare, measured by infant mortality and the Human Development Index (HDI), in recipient countries. Estimation is based on data for 104 countries over the period 1980-2000, and for subsamples of low-income and middle-income countries. Fixed effect estimates provide robust evidence that aid is associated with improved values of the welfare indicators, and this effect appears to be greater in low-income countries. Aid appears to increase welfare either directly or through the effect on growth, and there is no evidence that aid operates through public spending.

Research paper thumbnail of Aid, public spending and human welfare: evidence from quantile regressions

Journal of International Development, 2005

Does aid contribute to human development other than by increasing growth? In doing so, is aid mor... more Does aid contribute to human development other than by increasing growth? In doing so, is aid more or less effective in poorer countries (those with low levels of aggregate welfare)? This paper addresses these issues, assessing if there is cross-country aggregate evidence for an effect of aid on welfare levels. We posit that aid can enhance human development by financing public expenditures that increase welfare indicators. Using quantile regressions, we report evidence that aid is associated with higher human development (the Human Development Index) and lower infant mortality (both indicators of aggregate welfare). Where there are differences across quantiles, aid is more effective in countries below the median of the welfare distribution, i.e. with lower levels of human development. Insofar as aggregate welfare is (inversely) correlated with poverty, we find evidence that aid can make a positive contribution to alleviating poverty, and that the effect appears to be greater in countries with lower levels of human development indicators.

Research paper thumbnail of Aid and growth in Sub-Saharan Africa: accounting for transmission mechanisms

Journal of International Development, 2005

This paper is a contribution to the literature on aid and growth. Despite an extensive existing e... more This paper is a contribution to the literature on aid and growth. Despite an extensive existing empirical literature in this area, studies have not paid much attention to the importance of transmission mechanisms in determining the influence of aid inflows on growth rates. In other words, existing studies have failed to specify the mechanisms via which aid should affect growth. We identify investment as the most significant transmission mechanism, and also consider effects of aid via government spending and imports. With the use of residual generated regressors, we achieve a measure of total effect of aid on growth, accounting for the effect via investment. Pooled panel results for a sample of sub Saharan African countries over the period 1970 to 1997 point to a highly significant positive effect of foreign aid on growth. On average, each one percentage point increase in the aid/GNP ratio adds one-third of one percentage point to the growth rate. The results are robust to issues of endogeneity, outliers and country-specific effects. Africa's poor growth record should not therefore be attributed to aid ineffectiveness.

Research paper thumbnail of Evaluating aid effectiveness against a poverty-reduction criterion

Our objective is to test the hypothesis that aid can improve the welfare of the poor.