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Development Aid, Corruption, and the Happiness of Nations: Analysis of 118 countries over the years 1996-2009

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  • B. Mak ARVIN
  • Byron LEW

Abstract

Several studies emphasize the importance of the general environment in recipient countries for effectiveness of development aid. Another more recent strand of the literature considers whether the receipt of aid affects the happiness of developing countries. Since corruption, an indicator of the general environment, coexists with aid we consider an empirical model where both are arguments of a happiness production function. We present evidence on the relationship between happiness and aid given different levels of corruption. We find that accounting for corruption, aid has a negative marginal effect on happiness – but only in countries where corruption is most rampant.

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Bibliographic Info

Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 12 (2012)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:eaa:aeinde:v:12:y:2012:i:2_5

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Related research

Keywords: Happiness; Corruption; Foreign aid flows; Developing countries;

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References

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  1. J. Svensson, 1999. "Aid, Growth and Democracy," Economics and Politics, Wiley Blackwell, vol. 11(3), pages 275-297, November.
  2. Carol Graham, 2011. "Adaptation amidst Prosperity and Adversity: Insights from Happiness Studies from around the World," World Bank Research Observer, World Bank Group, vol. 26(1), pages 105-137, February.
  3. B. Mak Arvin & Byron Lew, 2010. "Aid and happiness: untangling the causal relationship in nine European donor countries," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 12(4), pages 341-358.
  4. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  5. Patrick GUILLAUMONT & Lisa CHAUVET, 1999. "Aid and Performance: A Reassessment," Working Papers 199910, CERDI.
  6. Bruno S. Frey, 2008. "Happiness: A Revolution in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062771, December.
  7. Guisan, M.C., 2009. "Government Effectiveness, Education, Economic Development And Well-Being: Analysis Of European Countries In Comparison With The United States And Canada, 2000-2007," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(1).
  8. B. Arvin & Byron Lew, 2009. "Happiness and Foreign Aid," Atlantic Economic Journal, International Atlantic Economic Society, vol. 37(3), pages 325-326, September.
  9. Jain, Arvind K, 2001. " Corruption: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 71-121, February.
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