Can Foreign Aid Buy Growth? William Easterly Economic research on foreign aid effectiveness and economic growth often becomes a political issue. However, when regression results are passed from one source to another, context is often lost, leading to misunderstandings in public discussions. An example is the academic paper by Burnside and Dollar (2000), which influenced foreign aid commitments. The study examined the relationship between foreign aid, economic policy, and per capita GDP growth using a new World Bank database. They found that aid had a positive impact on growth in countries with good policies but little effect in those with poor policies. The paper was widely cited by international agencies, leading to policy recommendations to increase foreign aid if other policies were good. This influenced the U.N. conference on Financing for Development in 2002, where the Burnside and Dollar findings were used to argue for increased aid. However, the results were not robust when tested with alternative definitions of aid, policies, and growth. Easterly argues that the empirical links between aid and growth are fragile and that the findings of Burnside and Dollar (2000) are not universally applicable. Easterly reviews recent empirical work on aid and growth, finding that the results are sensitive to definitions of aid, policies, and growth. He also discusses theoretical models, such as the "two-gap" model, which suggests that aid fills investment gaps and thus boosts growth. However, this model has theoretical and empirical shortcomings, as shown by Easterly's analysis of data. Easterly also discusses the issue of aid institutions and the emphasis on aid disbursements. Aid agencies often prioritize the volume of aid over its effectiveness, leading to a focus on observable indicators rather than long-term outcomes. He argues that aid agencies should focus on evaluating the effectiveness of aid projects and improving the quality of aid rather than increasing the quantity. Easterly concludes that foreign aid should have modest objectives and focus on benefiting some poor people some of the time rather than expecting it to launch a self-sustaining growth. He suggests that international aid agencies should improve the quality of aid before increasing the quantity. The article highlights the need for more rigorous evaluation and better understanding of the effectiveness of foreign aid.Can Foreign Aid Buy Growth? William Easterly Economic research on foreign aid effectiveness and economic growth often becomes a political issue. However, when regression results are passed from one source to another, context is often lost, leading to misunderstandings in public discussions. An example is the academic paper by Burnside and Dollar (2000), which influenced foreign aid commitments. The study examined the relationship between foreign aid, economic policy, and per capita GDP growth using a new World Bank database. They found that aid had a positive impact on growth in countries with good policies but little effect in those with poor policies. The paper was widely cited by international agencies, leading to policy recommendations to increase foreign aid if other policies were good. This influenced the U.N. conference on Financing for Development in 2002, where the Burnside and Dollar findings were used to argue for increased aid. However, the results were not robust when tested with alternative definitions of aid, policies, and growth. Easterly argues that the empirical links between aid and growth are fragile and that the findings of Burnside and Dollar (2000) are not universally applicable. Easterly reviews recent empirical work on aid and growth, finding that the results are sensitive to definitions of aid, policies, and growth. He also discusses theoretical models, such as the "two-gap" model, which suggests that aid fills investment gaps and thus boosts growth. However, this model has theoretical and empirical shortcomings, as shown by Easterly's analysis of data. Easterly also discusses the issue of aid institutions and the emphasis on aid disbursements. Aid agencies often prioritize the volume of aid over its effectiveness, leading to a focus on observable indicators rather than long-term outcomes. He argues that aid agencies should focus on evaluating the effectiveness of aid projects and improving the quality of aid rather than increasing the quantity. Easterly concludes that foreign aid should have modest objectives and focus on benefiting some poor people some of the time rather than expecting it to launch a self-sustaining growth. He suggests that international aid agencies should improve the quality of aid before increasing the quantity. The article highlights the need for more rigorous evaluation and better understanding of the effectiveness of foreign aid.