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Aid and happiness: untangling the causal relationship in nine European donor countries

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  • B. Mak Arvin
  • Byron Lew

Abstract

The goal of this paper is to use a simple causality test in the spirit of Granger to answer three questions on the relationship between the foreign aid disbursements of a donor country and its level of happiness. First, do higher aid flows make a donor happier? Second, does a happier donor give more aid? Third, does causality proceed in both directions simultaneously? Using data for nine European donors, we find that the answers to these questions are not uniform. In particular, causal relationships exist for France and the UK, but not for other countries.

Suggested Citation

  • 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.
    • Handle: RePEc:ids:gbusec:v:12:y:2010:i:4:p:341-358
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    Citations

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    Cited by:

    1. Simplice A. Asongu & Jacinta C. Nwachukwu, 2016. "Is the Threat of Foreign Aid Withdrawal an Effective Deterrent to Political Oppression? Evidence from 53 African Countries," Research Africa Network Working Papers 16/020, Research Africa Network (RAN).
    2. Simplice Asongu, 2016. "Reinventing Foreign Aid For Inclusive And Sustainable Development: Kuznets, Piketty And The Great Policy Reversal," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 736-755, September.
    3. Asongu, Simplice, 2014. "A brief clarification to the questionable economics of foreign aid for inclusive human development," MPRA Paper 64458, University Library of Munich, Germany.
    4. Simplice A. Asongu, 2014. "Reinventing foreign aid for inclusive and sustainable development: a survey," Research Africa Network Working Papers 14/033, Research Africa Network (RAN).
    5. Simplice A. Asongu & Joseph I. Uduji & Elda N. Okolo-Obasi, 2020. "Foreign aid volatility and lifelong learning," International Journal of Education Economics and Development, Inderscience Enterprises Ltd, vol. 11(4), pages 370-406.
    6. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Not all that glitters is gold: ICT and inclusive human development in Sub-Saharan Africa," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 3(4), pages 303-322.
    7. Asongu Simplice, 2014. "The Evolving Debate on the Effect of Foreign Aid on Corruption and Institutions in Africa," Working Papers of the African Governance and Development Institute. 14/009, African Governance and Development Institute..
    8. B. Mak ARVIN & Byron LEW, 2012. "Development Aid, Corruption, and the Happiness of Nations: Analysis of 118 countries over the years 1996-2009," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(2).

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