Abstract
During the last twenty years, there have been strong supporters of foreign
aid, and equally strong critiques. The debate is based on an effort to establish a
causal relationship between foreign aid and economic growth, and it is still ongoing.
Rather than seeking to uncover the causal relationships, I examine foreign aid and
its relation to structural indicators in aid dependent countries using a special type
of artificial neural networks, known as Kohonen maps. The findings suggest that
aid allocation and coordination could be based on institutional and climate-based
similarities across recipient countries rather than the geographical proximity or the
cultural ties, or preferences, between the donor and recipient countries.
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