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date: 24 November 2020

Abstract and Keywords

This article examines the relationship between foreign aid and poverty in developing countries, with the goal of determining whether donor governments are motivated and actively set out to reduce poverty in developing countries through the provision of aid but with the impact of aid on poverty reduction. It begins with an overview of the aid and poverty record based on global data from the 1980s onward, with particular emphasis on Official Development Assistance (ODA). It then considers the analytics of aid and poverty before reviewing the relevant literature, including studies that address the impact of aid on growth and growth elasticity of poverty. The article argues that aid has had a marginally positive impact on poverty reduction in developing countries, and that poverty would be slightly higher without it.

Keywords: foreign aid, poverty, developing countries, poverty reduction, Official Development Assistance, growth, growth elasticity of poverty

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