Corruption, aid volatility & growth
This paper revisits the debate on foreign aid effectiveness from a different perspective by analysing the role of institutional corruption on the effect of aid volatility on the output of developing nations. A simple political economy model is developed to show the effect of corruption on rent-seeking activities of incumbent legislators and their subsequent effect on country output. This phenomenon is empirically tested using data on 77 aid-receiving countries from the span of 1984 to 2007 using GMM to control for potential endogeneity.
Volume (Year): 33 (2013)
Issue (Month): 2 ()
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References listed on IDEAS
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- Michael A. Clemens & Steven Radelet & Rikhil Bhavnani, 2004.
"Counting chickens when they hatch: The short-term effect of aid on growth,"
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"Aid Volatility, Policy and Development,"
2007015, The University of Sheffield, Department of Economics, revised Oct 2007.
- George Mavrotas & David Fielding, 2010.
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- repec:bla:restud:v:58:y:1991:i:2:p:277-97 is not listed on IDEAS
- Timothy D. Lane & Leslie Lipschitz & Cristina Arellano & Ales Bulir, 2005.
"The Dynamic Implications of Foreign Aid and Its Variability,"
IMF Working Papers
05/119, International Monetary Fund.
- Arellano, Cristina & Bulír, Ales & Lane, Timothy & Lipschitz, Leslie, 2009. "The dynamic implications of foreign aid and its variability," Journal of Development Economics, Elsevier, vol. 88(1), pages 87-102, January.
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