Date of Award

Spring 2010

Document Type

Thesis

Degree Name

Bachelor of Science

Department

Economics

First Advisor

Dr. Jonathan B. Wight

Abstract

Recently, aid effectiveness has become a popular topic in the literature. Generally, it is measured by instrumental measures of well-being, specifically, GDP per capita. This paper uses a substantive approach, pioneered by Amartya Sen, to evaluate aid effectiveness. Substantive measures attempt to measure welfare directly. Specifically, I use infrastructure as measured by telephone lines per 100 people, life expectancy, economic diversification as measured by agriculture as a percentage of GDP, and education as measured by enrollment in primary school, as substantive measures of well- being. I find that aid is not allocated based on substantive need in the regions of sub- Saharan Africa, South Asia and Southeast Asia. I also find that aid has not directly contributed to improvements in substantive measures of well-being with the exception of education. The coefficient on the effective aid variable in the regression modeling education is significant at the 1% level and positive. The results of this regression indicate that effective aid has contributed to an increase in primary school enrollment, ceterus peribus, in the regions of sub-Saharan Africa and South and Southeast Asia.

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