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Local Financial Development and the Aid-Growth Relationship

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Author Info
Sayek, Selin
Nkusu, Mwanza

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Abstract

With official development assistance (ODA) set to rise as countries strive to meet the Millennium Development Goals (MDGs), aid effectiveness remains an important area of development policy. An increasing number of studies support the notion that ODA can contribute to growth in a nonlinear relationship. In this paper, we investigate a new hypothesis regarding this relationship: that deeper financial markets in aid-recipient countries facilitate the management of aid flows, thereby enhancing aid effectiveness. An empirical analysis, using a panel data set, finds robust support for the hypothesis. --

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Berlin 2006 with number 23.

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Date of creation: 2006
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Handle: RePEc:zbw:gdec06:4746

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Related research
Keywords: Foreign aid; economic growth; poverty; and financial development;

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Find related papers by JEL classification:
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
F35 - International Economics - - International Finance - - - Foreign Aid
O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General

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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.:
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    Other versions:
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Cited by:
(explanations, 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.)

  1. James, Ang, 2009. "Financial Liberalization and the Aid-Growth Relationship in India," MPRA Paper 14411, University Library of Munich, Germany. [Downloadable!]
    Other versions:
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