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This paper assesses the effectiveness of foreign aid in reducing poverty through its impact on human development indicators. We use a dataset of both bilateral aid and NGO aid flows. Our results show that NGO aid reduces infant mortality and does so more effectively than official bilateral aid. The impact on illiteracy is less significant. We also test whether foreign aid reduces government efforts in achieving developmental goals and find mixed evidence of a substitution effect.

Economic assistance -- Finance. --- Electronic books. -- local. --- Non-governmental organizations -- Finance. --- Poverty. --- Exports and Imports --- Public Finance --- NGOs (Non-Governmental Organizations) --- Foreign Aid --- Nonprofit Institutions --- NGOs --- Social Entrepreneurship --- National Government Expenditures and Health --- National Government Expenditures and Education --- International economics --- Public finance & taxation --- Civil service & public sector --- Foreign aid --- Nongovernmental organizations --- Health care spending --- Education spending --- Aid flows --- International relief --- Expenditures, Public --- Non-governmental organizations --- Economic assistance --- Hong Kong Special Administrative Region, People's Republic of China --- Finance. --- Ngos (Non-Governmental Organizations) --- Ngos