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Testing The Aid-Growth Nexus For South Asia, 1971-2005

  • Andaleeb KAOSAR
  • Idrees, M.

This article tests the relationship between the foreign aid and economic growth using the data from 1971 to 2005 for the region of South Asia. We find that foreign aid is highly effective towards working of the economy of the region. The Least Squares Dummy Variables (LSDV) model with fixed effects is employed to establish the existence of relationship between foreign aid and economic growth. Furthermore, this research draws some policy implication for the further development of the region keeping the effectiveness of foreign aid in mind.

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File URL: http://www.usc.es/economet/journals1/aeid/aeid10217.pdf
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Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 10 (2010)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:eaa:aeinde:v:10:y:2010:i:2_17
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  1. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 17-41.
  2. Angeles, Luis & Neanidis, Kyriakos C., 2009. "Aid effectiveness: the role of the local elite," Journal of Development Economics, Elsevier, vol. 90(1), pages 120-134, September.
  3. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages F191-F216, 06.
  4. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
  5. Agénor, Pierre-Richard & Bayraktar, Nihal & El Aynaoui, Karim, 2008. "Roads out of poverty? Assessing the links between aid, public investment, growth, and poverty reduction," Journal of Development Economics, Elsevier, vol. 86(2), pages 277-295, June.
  6. B. Seetanah, 2009. "Is Foreign Direct Investment Growth Conducive? New Evidences From Sub-Saharan African Countries, 1980-2005," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2).
  7. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, School of Economics and Management, University of Aarhus.
  8. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
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