Comments on: Technical shortcomings with IMF analysis http://www.owen.org/blog/194 Thoughts on development and beyond Tue, 07 Feb 2012 20:50:24 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Should Aid Focus on Economic Development? (part 2) | Development Policy blog http://www.owen.org/blog/194/comment-page-1#comment-12015 Should Aid Focus on Economic Development? (part 2) | Development Policy blog Wed, 25 May 2011 06:11:48 +0000 http://www.owen.org/blog/2005/06/30/technical-shortcomings-with-imf-analysis/#comment-12015 [...] challenges of aid growth regressions. Indeed, both studies have already been critiqued (see here and here). Although the underwhelming regression findings are lent credence by the absence of any [...] [...] challenges of aid growth regressions. Indeed, both studies have already been critiqued (see here and here). Although the underwhelming regression findings are lent credence by the absence of any [...]

]]> By: Does aid promote economic growth? http://www.owen.org/blog/194/comment-page-1#comment-4383 Does aid promote economic growth? Fri, 30 Oct 2009 05:03:54 +0000 http://www.owen.org/blog/2005/06/30/technical-shortcomings-with-imf-analysis/#comment-4383 [...] and oft-cited Rajan and Subramanian paper which claimed that there was no effect on growth (which I criticised at the time here) and finds that, if the regressions are done more carefully, those findings were not [...] [...] and oft-cited Rajan and Subramanian paper which claimed that there was no effect on growth (which I criticised at the time here) and finds that, if the regressions are done more carefully, those findings were not [...]

]]> By: Davina http://www.owen.org/blog/194/comment-page-1#comment-1006 Davina Tue, 05 Jul 2005 20:32:50 +0000 http://www.owen.org/blog/2005/06/30/technical-shortcomings-with-imf-analysis/#comment-1006 Hi Owen, No doubt you (and others) must have seen the new posting on IMF website from the authors today (as well as the article in FT). They made it clear that their study is not the view of IMF. ""Andrew Balls' article "Aid will not lift growth in Africa, IMF warns" (June 29), reporting on my research with Arvind Subramanian, is misleading; nor does it represent the International Monetary Fund's position. First, the aim of research papers is to inform and generate internal and external debate, but every research paper, including the ones on which Mr. Balls reports, clearly states that the views are those of the authors and not necessarily those of the IMF, its management or its board. What is more, the pessimism in your headline mischaracterises the implications drawn by us, as well as the position of the IMF. Your editorial "Time to prove aid works" (July 1) helps clarify what our studies do, and do not, say and is most welcome. Consistent with the implications drawn out in our research, the IMF has long held that promoting growth in Africa, and developing countries generally, requires comprehensive efforts by all concerned. The approach suggested by the Commission on Africa of experimentation to find what works is absolutely spot on and should be supported by the needed resources. The achievement of the Millennium Development Goals demands a truly global partnership. The developing countries themselves must take the lead through good governance and sound economic policies. But these efforts will work only in harmony with a global trading regime that is conducive to their exports and more - especially more effective - financial assistance. With so much of the world's attention focused on initiatives to reduce poverty, this is indeed a time of great possibilities. Our ambitions should be informed by a better understanding of the past, so that we can help forge a better future for those who most desperately need it." source: http://www.imf.org/external/np/vc/2005/070505.htm cheers, Davina Hi Owen,

No doubt you (and others) must have seen the new posting on IMF website from the authors today (as well as the article in FT). They made it clear that their study is not the view of IMF.

“”Andrew Balls’ article “Aid will not lift growth in Africa, IMF warns” (June 29), reporting on my research with Arvind Subramanian, is misleading; nor does it represent the International Monetary Fund’s position.

First, the aim of research papers is to inform and generate internal and external debate, but every research paper, including the ones on which Mr. Balls reports, clearly states that the views are those of the authors and not necessarily those of the IMF, its management or its board. What is more, the pessimism in your headline mischaracterises the implications drawn by us, as well as the position of the IMF. Your editorial “Time to prove aid works” (July 1) helps clarify what our studies do, and do not, say and is most welcome.

Consistent with the implications drawn out in our research, the IMF has long held that promoting growth in Africa, and developing countries generally, requires comprehensive efforts by all concerned. The approach suggested by the Commission on Africa of experimentation to find what works is absolutely spot on and should be supported by the needed resources. The achievement of the Millennium Development Goals demands a truly global partnership. The developing countries themselves must take the lead through good governance and sound economic policies. But these efforts will work only in harmony with a global trading regime that is conducive to their exports and more – especially more effective – financial assistance.

With so much of the world’s attention focused on initiatives to reduce poverty, this is indeed a time of great possibilities. Our ambitions should be informed by a better understanding of the past, so that we can help forge a better future for those who most desperately need it.” source: http://www.imf.org/external/np/vc/2005/070505.htm
cheers,
Davina

]]> By: Iyobosa Adeghe http://www.owen.org/blog/194/comment-page-1#comment-1005 Iyobosa Adeghe Fri, 01 Jul 2005 12:12:45 +0000 http://www.owen.org/blog/2005/06/30/technical-shortcomings-with-imf-analysis/#comment-1005 It’s a little too convenient to select the regressions which yielded significant estimates then to claim they’re clearly the correct ones. I find it hard to believe the authors would run a raft of regressions with varied functional forms, estimations methods, instrumental variables, independent variables, etc. if the true model was at all obvious from independent observation and past literature. For example, you could justify a linear model by claiming countries in question are so far behind in the development process there’s little reason to expect any approach towards productive capacity for all countries in question any time over the period studied. I’m sure that certain types of aid can yield economic growth, but it’s unlikely that the issue is as black and white as you suggest. Not being an econometrician, more concrete thoughts on your colleague’s criticisms aren’t possible. <i>Owen replies: Iyobosa - I'm afraid I did not make my point clear. There are good theoretical reasons for a different model specification, and that different model is well supported by the data. It shows a strong, statistically significant correlation between aid and growth. The authors have chosen a functional form which does not demonstrate a statistically significant relationship between aid and growth; but they should not reach the more general conclusion that there is no relationship between aid and growth. There is plenty of evidence of such a relationship.</i> It’s a little too convenient to select the regressions which yielded significant estimates then to claim they’re clearly the correct ones. I find it hard to believe the authors would run a raft of regressions with varied functional forms, estimations methods, instrumental variables, independent variables, etc. if the true model was at all obvious from independent observation and past literature. For example, you could justify a linear model by claiming countries in question are so far behind in the development process there’s little reason to expect any approach towards productive capacity for all countries in question any time over the period studied. I’m sure that certain types of aid can yield economic growth, but it’s unlikely that the issue is as black and white as you suggest. Not being an econometrician, more concrete thoughts on your colleague’s criticisms aren’t possible.

Owen replies: Iyobosa – I’m afraid I did not make my point clear. There are good theoretical reasons for a different model specification, and that different model is well supported by the data. It shows a strong, statistically significant correlation between aid and growth. The authors have chosen a functional form which does not demonstrate a statistically significant relationship between aid and growth; but they should not reach the more general conclusion that there is no relationship between aid and growth. There is plenty of evidence of such a relationship.

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