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The effect of foreign aid on corruption: A quantile regression approach

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  • Okada, Keisuke
  • Samreth, Sovannroeun

Abstract

This paper investigates the effect of foreign aid on corruption using a quantile regression method. Our estimation results illustrate that foreign aid generally lessens corruption and, in particular, its reduction effect is larger in countries with low levels of corruption. In addition, considering foreign aid by donors, our analysis indicates that while multilateral aid has a larger reduction impact on corruption, bilateral aid from the world’s leading donors, such as France, the United Kingdom, and the United States, has no significant effect on corruption. However, bilateral aid from Japan is shown to be statistically significant in lessening corruption.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 27969.

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Date of creation: 08 Jan 2011
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Handle: RePEc:pra:mprapa:27969

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Keywords: Foreign Aid; Corruption; Quantile Regression;

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  1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
  2. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  3. Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Economics Working Papers 870, Department of Economics and Business, Universitat Pompeu Fabra.
  4. Alberto Alesina & Beatrice Weder, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," American Economic Review, American Economic Association, vol. 92(4), pages 1126-1137, September.
  5. Billger, Sherrilyn M. & Goel, Rajeev K., 2009. "Do existing corruption levels matter in controlling corruption?: Cross-country quantile regression estimates," Journal of Development Economics, Elsevier, vol. 90(2), pages 299-305, November.
  6. Karuna Gomanee & Sourafel Girma & Oliver Morrissey, 2006. "Aid, Public Spending and Human Welfare: Evidence from Quantile Regressions," Working Papers id:761, eSocialSciences.
  7. Tavares, Jose, 2003. "Does foreign aid corrupt?," Economics Letters, Elsevier, vol. 79(1), pages 99-106, April.
  8. Svensson, Jakob, 1998. "Foreign aid and rent-seeking," Policy Research Working Paper Series 1880, The World Bank.
  9. Alesina, Alberto & Weder, Beatrice, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," Scholarly Articles 4553011, Harvard University Department of Economics.
  10. Danila Serra, 2006. "Empirical determinants of corruption: A sensitivity analysis," Public Choice, Springer, vol. 126(1), pages 225-256, January.
  11. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  12. 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.
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Cited by:
  1. Simplice A, Asongu, 2012. "Determinants of Health Professionals’ Migration in Africa," MPRA Paper 37632, University Library of Munich, Germany.
  2. Simplice A, Asongu, 2012. "Fighting corruption with cultural dynamics: when legal-origins, religious-influences and existing corruption-control levels matter," MPRA Paper 36893, University Library of Munich, Germany.
  3. Simplice A, Asongu, 2012. "Fighting corruption in Africa: do existing corruption-control levels matter?," MPRA Paper 36900, University Library of Munich, Germany.
  4. Simplice A, Asongu, 2012. "The impact of health worker migration on development dynamics: evidence of wealth-effects from Africa," MPRA Paper 38189, University Library of Munich, Germany.
  5. Simplice A, Asongu, 2012. "On the effect of foreign aid on corruption," MPRA Paper 36545, University Library of Munich, Germany.
  6. Simplice A, Asongu, 2012. "Are financial benefits of financial globalization questionable until greater domestic financial development has taken place?," MPRA Paper 37631, University Library of Munich, Germany.
  7. Simplice A, Asongu, 2012. "Globalization, (fighting) corruption and development: how are these phenomena linearly and nonlinearly related in wealth effects?," MPRA Paper 36899, University Library of Munich, Germany.
  8. Simplice A, Asongu, 2012. "Fighting corruption when existing corruption-control levels count : what do wealth effects tell us?," MPRA Paper 36901, University Library of Munich, Germany.
  9. Simplice A, Asongu, 2012. "Development thresholds of foreign aid effectiveness in Africa," MPRA Paper 38094, University Library of Munich, Germany.
  10. Simplice A, Asongu, 2012. "Fighting corruption when existing corruption-control levels count : what do wealth-effects tell us in Africa?," MPRA Paper 42180, University Library of Munich, Germany.
  11. Simplice A, Asongu, 2012. "Globalization and health worker crisis: what do wealth-effects tells us?," MPRA Paper 37633, University Library of Munich, Germany.
  12. Simplice A, Asongu, 2012. "Institutional benchmarking of foreign aid effectiveness in Africa," MPRA Paper 38095, University Library of Munich, Germany.

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