ABSTRACT
Econometricians and sociologists were the first to examine the relationship between aid and economic growth using statistical techniques during the 1960’s. The use of level of development, rather than rate of economic growth, was a “curious substitution” in the Hollis Chenery-A. M. Strout model wherein aid influences growth, not income level. M. A. Islam conducted a multivariate study of the role of foreign economic influence and domestic growth factors in the development process. In 1992, Ahmed conducted an econometric analysis regarding the macroeconomic contribution of foreign aid on economic growth and domestic savings in the Bangladesh economy. In 1988, the study of foreign capital and its impact on economic growth of developing countries remained controversial. M. A. Akef conducted an empirical study of the impact of foreign economic aid on investment in Egypt and examined the productivity of aid to Egypt from 1960-1984.
