Until now, the past studies of foreign aid and income inequality employed aggregate foreign aid figures and
found inconclusive result about the impact of foreign aid on income inequality. However, the current
contribution to foreign aid and growth literature by assessing the impact of different categories of foreign aid on
growth show more significant findings. As pointed by Ouattara and Strobl (2008), aggregate aid figures lead to
an aggregation bias findings because these figures cannot disentangle the individual effect of foreign aid on
growth. In addition, Mavrotas (2005) argues that the state of aid coordination may differ in each country. Thus it
makes sense to predict that the impact of aid in each country is not similar. Besides that Mavrotas (2002a) was
divided aid to India during the period 1970–1992 into three categories, which are program aid, project aid, and
technical assistance grants. He indicates that all three types of aid affected growth negatively.