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Aid, Economic Freedom, And Growth

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  • JAC C. HECKELMAN
  • STEPHEN KNACK

Abstract

"Foreign aid has often been intended by donors to entice recipient nations into policy and institutional reforms favorable to private sector economic development. In this study, we investigate the relationship between aid and changes to economic freedom in recipient nations over the 1990-2000 decade. The evidence is mixed. In general, we find that foreign aid has no significant effect on economic freedom overall. However, using a hedonic approach on the different categories of economic freedom, we find that aid has still managed to contribute toward a policy and institutional environment favorable to growth, as the different categories of economic freedom improved by aid more than offset those which are harmed by aid, in terms of their impact on growth". ("JEL "010, 019) Copyright (c) 2008 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 27 (2009)
Issue (Month): 1 (01)
Pages: 46-53

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Handle: RePEc:bla:coecpo:v:27:y:2009:i:1:p:46-53

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Cited by:
  1. Cole, Ismail M., 2014. "Short- and long-term growth effects of special interest groups in the U.S. states: A dynamic panel error-correction approach," MPRA Paper 54455, University Library of Munich, Germany, revised 02 Mar 2014.
  2. Bonnie Wilson & Jac Heckelman, 2010. "The Political Economy of Investment: Sclerotic Effects from Interest Groups," Working Papers 2012-03, Saint Louis University, Department of Economics.
  3. Humphreys, Brad & Maresova, Katerina & Ruseski, Jane, 2012. "Institutional Factors, Sport Policy, and Individual Sport Participation: An International Comparison," Working Papers 2012-1, University of Alberta, Department of Economics.

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