IDEAS home Printed from https://ideas.repec.org/a/aif/journl/v3y2019i2p138-145.html

The Impact of Foreign Aid in Economic Growth: An Econometric Analysis of Bangladesh

Author

Listed:
  • Binata Rani Sen
  • Tania Islam
  • Aminun Nahar
  • Md. Farid Dewan

Abstract

Foreign aid is one of the most important policy tools that rich countries use for helping poor countries to improve population well-being and facilitate economic and institutional development. Bangladesh shows much dependency on the developed countries like as foreign aid. We have a great contribution of foreign aid in our GDP. The empirical evidence on its benefits is mixed and has generated much controversy. This paper estimates six separate models by investigating the 20 years data for 1996-97 to 2015-16 periods in Bangladesh which shows that foreign aid to very poor countries accounts for very little of total global aid; reviews the evidence that foreign aid is often determined by the objectives of donor countries rather than the needs of the recipient countries; argues that the evidence on the impact of aggregate foreign aid is hindered by problems of measurement and identification, which are partly due to the different nature of aid. Application of this study is to identify the role of foreign aid in our economy. This study takes an important role by giving information about the real growth of the economy of Bangladesh after taking foreign aid from foreign countries.

Suggested Citation

  • Binata Rani Sen & Tania Islam & Aminun Nahar & Md. Farid Dewan, 2019. "The Impact of Foreign Aid in Economic Growth: An Econometric Analysis of Bangladesh," International Journal of Science and Business, IJSAB International, vol. 3(2), pages 138-145.
    • Handle: RePEc:aif:journl:v:3:y:2019:i:2:p:138-145
    as

    Download full text from publisher

    File URL: https://ijsab.com/wp-content/uploads/333.pdf
    Download Restriction: no
    File URL: https://ijsab.com/volume-3-issue-2/1836
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christopher S. Adam & David L. Bevan, 2006. "Aid and the Supply Side: Public Investment, Export Performance, and Dutch Disease in Low-Income Countries," The World Bank Economic Review, World Bank, vol. 20(2), pages 261-290.
    2. Nuzat Tasnim Dristy, 2016. "The Macroeconomic Impact of Foreign Aid in Bangladesh Before and After the Paris Declaration," Bangladesh Development Research Working Paper Series (BDRWPS) BDRWPS No. 32, Bangladesh Development Research Center (BDRC).
    3. Adam, Christopher & Chambas, Gerard & Guillaumont, Patrick & Guillaumont Jeanneney, Sylviane & Gunning, Jan Willem, 2004. "Performance-Based Conditionality: A European Perspective," World Development, Elsevier, vol. 32(6), pages 1059-1070, June.
    4. Mr. Tsidi M Tsikata, 1998. "Aid Effectiveness: A Survey of the Recent Empirical Literature," IMF Policy Discussion Papers 1998/001, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Md Ismail Hossain & Md Istiak Hossain & Mollah Aminul Islam & Md Reza Sultanuzzaman, 2022. "Does Foreign Aid Have an Expected Role in the Economic Growth of Bangladesh? An Analysis in ARDL Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 12(6), pages 113-126, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4415-4523, Elsevier.
    2. Sylviane GUILLAUMONT JEANNENEY & Patrick GUILLAUMONT, 2006. "Big Push versus Absorptive Capacity: How to Reconcile the Two Approaches," Working Papers 200614, CERDI.
    3. Quibria, M.G & Ahmad, Shafi, 2007. "Aid Effectiveness in Bangladesh," MPRA Paper 10299, University Library of Munich, Germany, revised Sep 2008.
    4. Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2011. "Big Push versus Absorptive Capacity: How to Reconcile the Two Approaches," CERDI Working papers halshs-00564565, HAL.
    5. Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2011. "Absorptive Capacity: More Than the Volume of Aid, its Modalities Matter," CERDI Working papers halshs-00557130, HAL.
    6. Quibria, M.G. & Islam, Anika, 2014. "Aid Effectiveness in Bangladesh: Development with Governance Challenges," MPRA Paper 63759, University Library of Munich, Germany.
    7. Quibria, M.G., 2014. "Aid effectiveness: research, policy and unresolved issues," MPRA Paper 86215, University Library of Munich, Germany, revised 2014.
    8. Patrick Guillaumont, 2011. "Aid effectiveness for poverty reduction:macroeconomic overview and emerging issues," CERDI Working papers halshs-00554285, HAL.
    9. Zoulfikar Mehoumoud Issop, 2016. "Le Syndrome hollandais dans les DOM est-il toujours d'actualité ?," Post-Print hal-01618689, HAL.
    10. Gaoussou Diarra, 2011. "Aid unpredictability and absorptive capacity: analyzing disbursement delays in Africa," Economics Bulletin, AccessEcon, vol. 31(1), pages 1004-1017.
    11. Channing Arndt & Sam Jones & Finn Tarp, 2016. "What Is the Aggregate Economic Rate of Return to Foreign Aid?," The World Bank Economic Review, World Bank, vol. 30(3), pages 446-474.
    12. Pablo Selaya & Rainer Thiele, 2010. "Aid and Sectoral Growth: Evidence from Panel Data," Journal of Development Studies, Taylor & Francis Journals, vol. 46(10), pages 1749-1766.
    13. Júlio Vicente Cateia & Maurício Vaz Lobo Bittencourt & Terciane Sabadini Carvalho & Luc Savard, 2023. "Funding schemes for infrastructure investment and poverty alleviation in Africa: Evidence from Guinea‐Bissau," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1505-1529, August.
    14. Manfred Wiebelt & Rainer Schweickert & Clemens Breisinger & Marcus Böhme, 2011. "Oil revenues for public investment in Africa: targeting urban or rural areas?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(4), pages 745-770, November.
    15. Ranjan Kumar Dash & Deepa Jitendra Gupta & Tarun Khandelwal, 2024. "Revisited the role of foreign aid in capital formation: experience of South Asian countries," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    16. Clausen, Volker & Schürenberg-Frosch, Hannah, 2012. "Aid, spending strategies and productivity effects: A multi-sectoral CGE analysis for Zambia," Economic Modelling, Elsevier, vol. 29(6), pages 2254-2268.
    17. repec:ags:aesdoc:204910 is not listed on IDEAS
    18. Channing Arndt & Sam Jones & Finn Tarp, 2016. "What Is the Aggregate Economic Rate of Return to Foreign Aid?," World Bank Economic Review, World Bank Group, vol. 30(3), pages 446-474.
    19. Yiping Huang & Jian Chang & Prema-Chandra Athukorala & Sisira Jayasuriya, 2013. "Economic Policy Shifts in Sri Lanka: The Post-Conflict Development Challenge," Asian Economic Papers, MIT Press, vol. 12(2), pages 1-28, Summer.
    20. Sayeed, Yeasmin, 2014. "Trade-offs in Achieving Human Development Goals for Bangladesh," Working Papers 2014:6, Örebro University, School of Business.
    21. Felicitas Nowak-Lehmann & Axel Dreher & Dierk Herzer & Stephan Klasen & Inmaculada Martínez-Zarzoso, 2012. "Does foreign aid really raise per capita income? A time series perspective," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 288-313, February.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aif:journl:v:3:y:2019:i:2:p:138-145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Farjana Rahman (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.