arbiter
JournalsAccount

The Micro-Macro Paradox of Aid Revisited

Martin Paldam

Economists' Voice2025https://doi.org/10.1515/ev-2025-0041article
AJG 1ABDC B
Weight
0.50

Abstract

The goal of development aid used to be development as proxied by economic growth. This goal was operationalized in cost benefit analysis. However, aid effectiveness has always been in doubt. The doubts have had two consequences: Aid is falling, and its goal has been widened to make it non-operational. This paper looks at the reasons for the doubt, the micro-macro paradox of aid: (i) Micro project evaluations find a fair efficiency. The cost-benefit tools used to evaluate aid projects should aggregate to the macro. (ii) Univariate macro estimates find a zero-correlation result, and that lags solve the causality problem. (iii) Multivariate macro estimates find highly variable results with a small meta-average. A list of possible explanations that may reduce the paradox is provided, but the effect-sizes of these possibilities are hard to assess. It is argued that as the operational goal of aid has vanished, so has the support for aid.

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1515/ev-2025-0041

Or copy a formatted citation

@article{martin2025,
  title        = {{The Micro-Macro Paradox of Aid Revisited}},
  author       = {Martin Paldam},
  journal      = {Economists' Voice},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1515/ev-2025-0041},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

The Micro-Macro Paradox of Aid Revisited

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.