…..aid inflows of about 10 per cent of GDP lead to an increase in economic growth of about 1 percentage point. (Reassuringly, this is also broadly consistent with a common sense calculation of the sort of effect that aid ought to have.) They also find evidence of bigger, more positive effects of aid, consistent with positive effects of aid on productivity.
Owen Barder points us to recent research here, which confirms what he terms “common sense”. Of course aid promotes economic growth! Isn’t it obvious? The problem with the regression based analyses is that it isn’t obvious. To undertake or interpret good regressions demands considerable skill and training that most involved in the aid debates don’t have. Owen has it, as does Easterly. For me, Easterly confirms my common sense – but I have no way of confirming it.