Aiding the Mdg\u27s: How Important is Development Assistance in Achieving the Millennium Development Goals

The objective of this paper is to study the impact of aid on human development. This impact in turn indicates whether this aid is on course to help developing nations achieve their respective Millennium Development Goals by the target date of 2015. Using time series data on 136 aid recipient countries from 2000-2010 and infant mortality, illiteracy and poverty as measures of human development, this paper assesses the direct effect of foreign aid on these three developmental indices. The empirical findings of this study yield inconclusive results much like many prior research studies on the effectiveness of foreign aid. This paper also develops a quality measure of aid; however this variable also shows inconclusive results. This study reinforces that the quality and knowledge aspects of the aid flowing to developing countries are as important as the monetary aspect of this aid