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Aid & innovation: a boost to the effectiveness of aid?

Abstract: One of the most unanimous results of the economic literature is that innovation is a critical factor for sustained growth. Despite this consensus, previous research has not studied the impact of foreign aid devoted to promote developing countries’ innovation capacities. For this reason, this paper analyzes the impact of Official Development Assistance for Science and Technology (ODA-ST) in the period prior to the last international economic recession. The analysis offers five important conclusions for better tailoring aid policies: i) ODA-ST effectively stimulates economic growth; ii) its impact may be higher in countries with low innovation capacities; iii) innovation exerts the strongest impact on growth; iv) income inequalities are an important obstacle for growth; and v) there is a a slow process of divergence in per capita income levels among developing countries. Therefore innovation is confirmed as a strategic “bet” on development, while focusing public foreign aid on enhancing developing countries’ innovation capacities —specially in the least innovative ones— may constitute a “boost” to the effectiveness of aid.

 Fuente: Revista INTERNACIONAL de COOPERACIÓN y DESARROLLO ISSN (online): 2382-5014 VOL. 2, NÚM. 1. ENERO - JUNIO, 2015

Editorial: Universidad de San Buenaventura

 Año de publicación: 2015

Nº de páginas: 32

Tipo de publicación: Artículo de Revista

ISSN: 2382-5014