Typescript prepared by the Authors. UNU-WIDER gratefully acknowledges specific programme contributions from the governments of Denmark (Ministry of Foreign Affairs, Danida) and Sweden (Swedish International Development Cooperation Agency-Sida) for ReCom. UNU-WIDER also gratefully acknowledges core financial support to its work programme from the governments of Denmark, Finland, Sweden and the United Kingdom. The World Institute for Development Economics Research (WIDER) was established by the United Nations University (UNU) as its first research and training centre and started work in Helsinki, Finland in 1985. The Institute undertakes applied research and policy analysis on structural changes affecting the developing and transitional economies, provides a forum for the advocacy of policies leading to robust, equitable and environmentally sustainable growth, and promotes capacity strengthening and training in the field of economic and social policy-making. Work is carried out by staff researchers and visiting scholars in Helsinki and through networks of collaborating scholars and institutions around the world.

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This paper investigates the link between IMF‐World Bank stabilisation‐cum‐structural adjustment programs and long‐run economic performance in 18 African countries on a country‐specific basis for the period 1960–2009. We employ a structural break approach to study the impact on long‐run growth trajectories of the introduction of adjustment programs. The analysis reveals that only few countries have shown positive and sustained results. The traditional (first‐generation) Fund‐Bank adjustment package is linked with sustained increase in Gross Domestic Product, export and investment growth rates only in two countries (Ghana and Uganda). Many African economies remained on their pre‐reform growth paths whereas some others experienced growth deceleration, despite more‐than‐a‐decade‐long adjustment. Taken as a whole, countries in the CFA franc currency zone fared much worse than their non‐CFA counterparts because of the different adjustment strategies pursued. Copyright © 2014 John Wiley & Sons, Ltd.

This article investigates the long‐run macroeconomic effects of aid and disaggregated aid flows in Ethiopia, currently the world's largest recipient of official development assistance, for the period 1960‐2009. The results show that aid affects gross domestic product (GDP), investment and imports positively, whereas it is negatively associated with government consumption. Our results concerning the impacts of disaggregated aid stand in stark contrast to earlier work. Bilateral aid increases investment and GDP and is negatively associated with government consumption, whereas multilateral aid is only positively associated with imports. Grants contribute to GDP, investment and imports, whereas loans affect none of the variables. Finally, there is evidence to suggest that multilateral aid and loans have been disbursed in a procyclical fashion. Copyright © 2013 John Wiley & Sons, Ltd.