Recently, Calderón et al. (2006) found no robust relationship between inflows of foreign aid and income
inequality eventhough in good institutional quality. However, the undoing of foreign aid benefits through trade
barriers restricting access to markets in developed countries is also discovered (Bourguignon et al. 2008).
Foreign aid is found to improve income distribution in the presence of good institutions (Calderon et al. 2009).
Two studies, on the other hand, find a negative relationship (Bjørnskov 2009; Layton & Nielson 2009) but the
relationship to be robust in one of the cases. Although the other study produces somewhat inconclusive results,
they find a robust “zero to positive” correlation between aid and inequality (Layton & Nielson 2009). It is also
found that aid deteriorates the current period inequality more than inequality in the following period or later.
Recently, Shaifullah (2011) presented the theoretical perspectives of foreign aid's impact on income distribution
and look for empirical evidence of such an alleged relationship in a panel of 94 countries over 20 years. They
found the evidence to the contrary that aid causes small reductions in inequality.