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Governance and foreign aid in Pacific Island countries

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  • Azmat Gani

    (School of Economics, Faculty of Business and Economics, The University of South Pacific, Suva, Fiji Islands)

Abstract

This paper examines the relationship between indicators of governance and per capita foreign aid in a cross-section of seven PICs. Controlling for poor economic growth, foreign exchange shortage and small size, a fixed-effects model correcting for AR (1) errors is tested for the period 1996-2004 that incorporates five measures of governance. The findings here confirm that voice and accountability, rule of law and corruption are negatively correlated with per capita foreign aid. However, regulatory quality and government effectiveness are positively associated with per capita foreign aid. Some policy implications are drawn. Copyright © 2008 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jid.1480
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 21 (2009)
Issue (Month): 1 ()
Pages: 112-125

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Handle: RePEc:wly:jintdv:v:21:y:2009:i:1:p:112-125

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Web page: http://www3.interscience.wiley.com/journal/5102/home

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  1. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-83, May.
  2. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
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  7. repec:peb:papers:338 is not listed on IDEAS
  8. John Hudson & Paul Mosley, 2001. "Aid policies and growth: in search of the holy grail," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(7), pages 1023-1038.
  9. Cole, Rodney V., 1993. "Economic development in the South Pacific promoting the private sector," World Development, Elsevier, vol. 21(2), pages 233-245, February.
  10. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer.
  11. Anderson, James E. & Marcouiller, S.J. Douglas, 1997. "Trade and Security, I: Anarchy," Working Paper Series 477, Research Institute of Industrial Economics.
  12. Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, vol. 89(4), pages 982-993, September.
  13. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  14. Paul Mosley & John Hudson & Arjan Verschoor, 2004. "Aid, Poverty Reduction and the 'New Conditionality'," Economic Journal, Royal Economic Society, vol. 114(496), pages F217-F243, 06.
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