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On the effect of foreign aid on corruption

Author

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  • Simplice A Asongu

    (HEC-Management School(University of Liège))

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.

Suggested Citation

  • Simplice A Asongu, 2012. "On the effect of foreign aid on corruption," Economics Bulletin, AccessEcon, vol. 32(3), pages 2174-2180.
  • Handle: RePEc:ebl:ecbull:eb-12-00172
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I3-P210.pdf
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    References listed on IDEAS

    as
    1. Shleifer, Andrei & La Porta, Rafael & Lopez-De-Silanes, Florencio & Vishny, Robert W., 1997. "Legal Determinants of External Finance," Scholarly Articles 30728041, Harvard University Department of Economics.
    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. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    4. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    5. Okada, Keisuke & Samreth, Sovannroeun, 2012. "The effect of foreign aid on corruption: A quantile regression approach," Economics Letters, Elsevier, vol. 115(2), pages 240-243.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Foreign Aid; Political Economy; Development; Africa;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • F5 - International Economics - - International Relations, National Security, and International Political Economy

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