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On the effect of foreign aid on corruption

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  • Simplice A, Asongu

Abstract

The Okada & Samreth(2012, EL) finding that aid deters corruption could have an important influence on policy and academic debates. This paper partially negates their criticism of the mainstream approach to the aid-development nexus. Using updated data(1996-2010) from 52 African countries we provide robust evidence of a positive aid-corruption nexus. Development assistance fuels(mitigates) corruption(the control of corruption) in the African continent. As a policy implication, the Okada & Samreth(2012, EL) finding for developing countries may not be relevant for Africa.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36545.

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Date of creation: 09 Feb 2012
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Handle: RePEc:pra:mprapa:36545

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Keywords: Foreign Aid; Political Economy; Development; Africa;

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  1. Okada, Keisuke & Samreth, Sovannroeun, 2011. "The effect of foreign aid on corruption: A quantile regression approach," MPRA Paper 27969, University Library of Munich, Germany.
  2. 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.
  3. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
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