Analysis of the effectiveness of official development assistance

The present paper presents an assessment of the effectiveness of Official Development Assistance (ODA) in promoting growth and reducing poverty in recipient countries, as well as its capacity to influence the main macroeconomic variables such as investment, savings, consumption, tax burden and the rate of inflation. For this purpose, we use both classical regression analysis and a structural model. In the former case, ordinary least squares (OLS) are used to estimate a series of equations in which ODA plays the role of independent variable. The second case involves a multiple-indicator, multiple-causes (MIMIC) model with three latent variables, one of which, ODA, is exogenous.