02176cas a2200253 a 4500 AALejournalIMF015487 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513514437 1018-5941 BD-DhAAL BD-DhAAL Dreher, Axel. Aid and Growth at the Regional Level / Axel Dreher, Steffen Lohmann. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper brings the aid effectiveness debate to the sub-national level. We hypothesize the nonrobust results regarding the effects of aid on development in the previous literature to arise due to the effects of aid being insufficiently large to measurably affect aggregate outcomes. Using geocoded data for World Bank aid to a maximum of 2,221 first-level administrative regions (ADM1) and 54,167 second-level administrative regions (ADM2) in 130 countries over the 2000-2011 period, we test whether aid affects development, measured as nighttime light growth. Our preferred identification strategy exploits variation arising from interacting a variable that indicates whether or not a country has passed the threshold for receiving IDA's concessional aid with a recipient region's probability to receive aid, in a sample of 478 ADM1 regions and almost 8,400 ADM2 regions from 21 countries. Controlling for the levels of the interacted variables, the interaction provides a powerful and excludable instrument. Overall, we find significant correlations between aid and growth in ADM2 regions, but no causal effects. Mode of access: Internet Lohmann, Steffen. IMF Working Papers; Working Paper ; No. 2015/196 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/196/001.2015.issue-196-en.xml IMF e-Library