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Does Foreign Aid Improve Governance?

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  • Busse, Matthias
  • Groening, Steffen

Abstract

This paper analyses the impact of aid flows on governance. Using an instrumental variable approach and a large country sample, we find that aid has a negative rather than a positive influence on governance. This outcome is robust to various model specifications. --

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Bibliographic Info

Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Hannover 2010 with number 6.

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Date of creation: 2010
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Handle: RePEc:zbw:gdec10:6

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Keywords: Official Development Assistance; Governance;

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References

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  1. 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.
  2. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
  3. Raghuram Rajan & Arvind Subramanian, 2007. "Does Aid Affect Governance?," American Economic Review, American Economic Association, vol. 97(2), pages 322-327, May.
  4. Brautigam, Deborah A & Knack, Stephen, 2004. "Foreign Aid, Institutions, and Governance in Sub-Saharan Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 255-85, January.
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Cited by:
  1. Yener Altunbas & John Thornton, 2010. "Does Paying Taxes Improve the Quality of Governance? Cross-Country Evidence," Working Papers 10006, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
  2. Juan Felipe Riaño-Rodríguez, 2014. "More than Words and Good Intentions: The Political Agenda-Setting Power," DOCUMENTOS CEDE 011011, UNIVERSIDAD DE LOS ANDES-CEDE.
  3. Audrey Rose Menard, 2014. "Do natural resources condition the aid-governance relationship? Evidence from Africa," Economics Bulletin, AccessEcon, vol. 34(2), pages 1317-1326.
  4. Ansgar Belke & Ingo Bordon & Inna Melnykovska & Rainer Schweickert, 2009. "Prospective NATO or EU Membership and Institutional Change in Transition Countries," Ruhr Economic Papers 0131, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Nunnenkamp, Peter & Öhler, Hannes, 2010. "Throwing foreign aid at HIV/AIDS in developing countries: Missing the target?," Center for European, Governance and Economic Development Research Discussion Papers 111, University of Goettingen, Department of Economics.
  6. Nunnenkamp, Peter & Öhler, Hannes, 2010. "Throwing foreign aid at HIV/AIDS in developing countries: Missing the target?," Center for European, Governance and Economic Development Research Discussion Papers 111, University of Goettingen, Department of Economics.
  7. Cristina Boţa-Avram, 2013. "The Interplay Between Governance and Global Competitiveness: Evidence from a Cross-Country Survey," Transition Studies Review, Springer, vol. 20(3), pages 381-388, November.
  8. David Fielding, 2011. "The Dynamics of Aid and Political Rights," Working Papers 1102, University of Otago, Department of Economics, revised Apr 2011.
  9. Unbreen Qayyum, 2013. "Institutional Quality, Conflict and Aid Dependency," PIDE-Working Papers 2013:94, Pakistan Institute of Development Economics.
  10. Zohid Askarov & Hristos Doucouliagos, 2013. "Does aid improve democracy and governance? A meta-regression analysis," Public Choice, Springer, vol. 157(3), pages 601-628, December.
  11. Ansgar Belke & Ingo Bordon & Inna Melnykovska & Rainer Schweickert, 2009. "Prospective Membership and Institutional Change in Transition Countries," Kiel Working Papers 1562, Kiel Institute for the World Economy.

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