IDEAS home Printed from https://ideas.repec.org/a/lus/reveco/v74y2023i3p251-264n2.html
   My bibliography  Save this article

Aid–Growth Nexus and Corruption

Author

Listed:
  • Shah Birendra Narayan

    (Hannam University, 34546, Daejeon, South Korea)

  • Hwang Jinyoung

    (Department of Economics, Hannam University, Hannam Ro 70, Daeduck Gu, 34430, Daejeon, South Korea)

  • Akdede Sacit Hadi

    (Department of Economics, Bakircay Universitesi, Seyrek Mevki Menemen İzmir, Menemen, 35665, Izmir, İzmir, Türkiye)

Abstract

Using data on 71 aid recipient countries over the period 2000–2019, this study examines the effect of the size and composition of foreign aid (Official Development Assistance, ODA) on economic growth. The size of ODA is positively correlated with growth, and the impact of an increase in ODA on growth decreases when ODA reaches a certain level. The influence of the composition of ODA in terms of grants and loans on growth is estimated differently depending on sample selection. The sample is divided into two sub-samples based on the median of the corruption perception index. The regression results show that grants have a positive and significant impact on growth without sample selection. However, loans have a positive and significant impact on growth in the sub-sample of less corrupt countries, but a negative and significant impact on growth in the sub-sample of more corrupt countries. Therefore, the results suggest that ODA is useful for inducing growth in the early stages of development. However, improvement in the economic environment in terms of reduced corruption is required to increase the positive impact of ODA in the form of loans on growth.

Suggested Citation

  • Shah Birendra Narayan & Hwang Jinyoung & Akdede Sacit Hadi, 2023. "Aid–Growth Nexus and Corruption," Review of Economics, De Gruyter, vol. 74(3), pages 251-264, November.
    • Handle: RePEc:lus:reveco:v:74:y:2023:i:3:p:251-264:n:2
    DOI: 10.1515/roe-2022-0041
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/roe-2022-0041
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/roe-2022-0041?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lus:reveco:v:74:y:2023:i:3:p:251-264:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.