Institutional Quality, Conflict and Aid Dependency
AbstractThis study attempts to explore the impact of foreign aid on the quality of governance and how conflicts, whether internal or external affect the overall situation. Conflicts affect governance directly by creating instability which adversely affects economic development as investment climate is fouled and output drops leading to fall in revenues. In this vicious cycle governance is left with no funds to improve institutional quality. Annual data from 1984 to 2010 have been used for the Asian developing economies. The results indicate a negative impact from the confluence of foreign aid in a climate of conflicts that leads to institutional deterioration. These results are robust for various alternative specifications.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Pakistan Institute of Development Economics in its series PIDE-Working Papers with number 2013:94.
Length: 16 pages
Date of creation: 2013
Date of revision:
Official Development Assistance; Governance; Conflict;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- F35 - International Economics - - International Finance - - - Foreign Aid
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
- NEP-CWA-2013-07-28 (Central & Western Asia)
- NEP-SEA-2013-07-28 (South East Asia)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Burnside, Craig & Dollar, David, 1997.
"Aid, policies, and growth,"
Policy Research Working Paper Series
1777, The World Bank.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004.
"Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development,"
Journal of Economic Growth,
Springer, vol. 9(2), pages 131-165, 06.
- Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2002. "Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development," NBER Working Papers 9305, National Bureau of Economic Research, Inc.
- Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers.
- Robert G. Murphy & Nicholas G. Tresp, 2006. "Government Policy and the Effectiveness of Foreign Aid," Boston College Working Papers in Economics 647, Boston College Department of Economics, revised 29 Aug 2006.
- Svensson, J., 1995.
"When Is Foreign Aid Policy Credible? Aid Dependence and Conditionality,"
600, Stockholm - International Economic Studies.
- Svensson, Jakob, 2000. "When is foreign aid policy credible? Aid dependence and conditionality," Journal of Development Economics, Elsevier, vol. 61(1), pages 61-84, February.
- Svensson, Jakob, 1997. "When is Foreign Aid Policy Credible? - Aid Dependence and Conditionality," Seminar Papers 600, Stockholm University, Institute for International Economic Studies.
- Svensson, Jakob, 1997. "When is foreign aid policy credible : aid dependence and conditionality," Policy Research Working Paper Series 1740, The World Bank.
- Daron Acemoglu & Simon Johnson, 2005.
Journal of Political Economy,
University of Chicago Press, vol. 113(5), pages 949-995, October.
- Eskander Alvi & Debasri Mukherjee & Elias Kedir Shukralla, 2008. "Aid, Policies, and Growth in Developing Countries: A New Look at the Empirics," Southern Economic Journal, Southern Economic Association, vol. 74(3), pages 693-706, January.
- Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross-Country Empirical Tests," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 310-329, October.
- Raghuram Rajan & Arvind Subramanian, 2007. "Does Aid Affect Governance?," American Economic Review, American Economic Association, vol. 97(2), pages 322-327, May.
- Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2001.
"On the Empirics of Foreign Aid and Growth,"
EPRU Working Paper Series
03-13, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics, revised Sep 2003.
- Muhammed Islam, 2005. "Regime changes, economic policies and the effect of aid on growth," Journal of Development Studies, Taylor & Francis Journals, vol. 41(8), pages 1467-1492.
- Rati Ram, 2004. "Recipient country's 'policies' and the effect of foreign aid on economic growth in developing countries: additional evidence," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(2), pages 201-211.
- Stiglitz, Joseph E, 1999. "The World Bank at the Millennium," Economic Journal, Royal Economic Society, vol. 109(459), pages F577-97, November.
- Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
- Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
- Collier, Paul & Hoeffler, Anke, 2004.
"Aid, policy and growth in post-conflict societies,"
European Economic Review,
Elsevier, vol. 48(5), pages 1125-1145, October.
- Collier, Paul & Hoeffler, Anke, 2002. "Aid, policy, and growth in post-conflict societies," Policy Research Working Paper Series 2902, The World Bank.
- Busse, Matthias & Groening, Steffen, 2010.
"Does Foreign Aid Improve Governance?,"
Proceedings of the German Development Economics Conference, Hannover 2010
6, Verein für Socialpolitik, Research Committee Development Economics.
- Svensson, Jakob, 2000.
"Foreign aid and rent-seeking,"
Journal of International Economics,
Elsevier, vol. 51(2), pages 437-461, August.
- Simon Feeny & Mark McGillivray, 2010. "Aid and Growth in Small Island Developing States," Journal of Development Studies, Taylor & Francis Journals, vol. 46(5), pages 897-917.
- Easterly, William, 1999. "The ghost of financing gap: testing the growth model used in the international financial institutions," Journal of Development Economics, Elsevier, vol. 60(2), pages 423-438, December.
- Simon Feeny, 2005. "The Impact of Foreign Aid on Economic Growth in Papua New Guinea," Journal of Development Studies, Taylor & Francis Journals, vol. 41(6), pages 1092-1117.
- Douglass C, North, 1992. "Institutions, Ideology, and Economic Performance," Cato Journal, Cato Journal, Cato Institute, vol. 11(3), pages 477-496, Winter.
- Manuel Oechslin, 2006. "Foreign Aid, Political Instability, and Economic Growth," IEW - Working Papers 310, Institute for Empirical Research in Economics - University of Zurich.
- C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 17-41.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Khurram Iqbal).
If references are entirely missing, you can add them using this form.