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Foreign Aid and Economic Growth in the Philippines

Author

Listed:
  • Rajarshi Mitra

    (Kyushu University)

  • Md. Sharif Hossain

    (University of Dhaka)

Abstract

With recent studies generating skepticism toward aid-effectiveness for economic growth of some aid-dependent economies, the need to re-examine the effectiveness of foreign aid for economic growth has gained increasing importance. This paper examines the role of foreign aid in per-capita economic growth in the Philippines, a country that has historically been one of the largest recipients of foreign aid. A VECM is estimated for the period 1970-2010. Results indicate a significantly negative relationship between foreign aid and per-capita economic growth. A 1% rise in the share of aid in GDP results in a fall in per-capita real income by 0.51%.

Suggested Citation

  • Rajarshi Mitra & Md. Sharif Hossain, 2013. "Foreign Aid and Economic Growth in the Philippines," Economics Bulletin, AccessEcon, vol. 33(3), pages 1706-1714.
    • Handle: RePEc:ebl:ecbull:eb-13-00061
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I3-P159.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Pahlaj Moolio & Somphyvatanak Kong, 2016. "Foreign Aid and Economic Growth: Panel Cointegration Analysis for Cambodia, Lao PDR, Myanmar, and Vietnam," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 2(4), pages 417-428, October.
    3. Moheddine Younsi & Marwa Bechtini & Hasna Khemili, 2021. "The effects of foreign aid, foreign direct investment and domestic investment on economic growth in African countries: Nonlinearities and complementarities," African Development Review, African Development Bank, vol. 33(1), pages 55-66, March.
    4. Ismahene Yahyaoui & Najeh Bouchoucha, 2020. "Foreign Aid-Growth Nexus in Africa: Do Institutions Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(4), pages 1663-1689, December.
    5. Santos Bila & Mduduzi Biyase & Matias Farahane & Thomas Udimal, 2023. "Foreign Aid And Economic Growth In Sub-Saharan African Countries," Economics Working Papers edwrg-03-2023, College of Business and Economics, University of Johannesburg, South Africa, revised 2023.

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    More about this item

    Keywords

    VECM; Cointegration Test; Short-Run and Long-Run Elasticities.;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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