The impact of foreign assistance on agricultural growth

Foreign assistance to agriculture takes many forms and is intended to accomplish a variety of economic, political, and humanitarian objectives. Donors and recipients alike have a vested interest in the economic effectiveness of agricultural aid. An analysis indicates that such aid, since 1970, has improved agricultural productivity in Asia and, to a lesser extent, in sub-Saharan Africa. Aid, in the aggregate, does not appear to have increased agricultural productivity in the Middle East or Latin America. The results also indicate that aid has been less effective in countries with high levels of external debt or sizable fiscal deficits. Additional results suggest that aid effectiveness did not vary by income level of the country or by the relative importance of the agricultural sector. Additional analysis is needed to explain why foreign assistance seems to be most effective in countries with an intermediate level of external debt.