IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v18y2025i4p221-d1639077.html
   My bibliography  Save this article

The Effects of Bilateral and Multilateral Official Development Assistance on Vietnam’s Economic Growth

Author

Listed:
  • Loc Dong Truong

    (School of Economics, Can Tho University, Can Tho City 94115, Vietnam)

  • H. Swint Friday

    (RELLIS Campus, Texas A&M University, Bryan, TX 77807, USA)

  • Anh Thoai Ly

    (School of Economics, Can Tho University, Can Tho City 94115, Vietnam)

Abstract

This study investigates the effects of bilateral and multilateral official development assistance on Vietnam’s economic growth from 1986 to 2022. Utilizing the autoregressive distributed lag (ARDL) bounds testing approach, our results show that in the shortrun, bilateral official development assistance has a significant positive influence on economic growth, whereas multilateral official development assistance has a significant negative influence on economic growth. However, the empirical findings reveal that both bilateral and multilateral official development assistance have no influence on economic growth in the longterm. Given that bilateral official development assistance has a significantly positive impact on economic growth in the shortrun, Vietnam should strengthen partnerships with donor countries. Tailoring projects to align with bilateral donors’ interests can lead to more effective interventions. In addition, multilateral official development assistance has been found to have a negative impact on economic growth in the shortrun, possibly due to complex approval and implementation processes. Therefore, the government should advocate for more flexible project requirements and reduce bureaucratic hurdles. Simplifying the approval process can help accelerate project implementation and enhance immediate economic benefits. Moreover, because official development assistance does not impact on economic growth in the longterm, Vietnam should focus on sustainable development strategies that reduce dependency on external aid. This includes investing in human capital, innovation, and technology to foster endogenous growth.

Suggested Citation

  • Loc Dong Truong & H. Swint Friday & Anh Thoai Ly, 2025. "The Effects of Bilateral and Multilateral Official Development Assistance on Vietnam’s Economic Growth," JRFM, MDPI, vol. 18(4), pages 1-15, April.
    • Handle: RePEc:gam:jjrfmx:v:18:y:2025:i:4:p:221-:d:1639077
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/18/4/221/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/18/4/221/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    2. Karuna Gomanee & Sourafel Girma & Oliver Morrissey, 2005. "Aid and growth in Sub-Saharan Africa: accounting for transmission mechanisms," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1055-1075.
    3. 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.
    4. Muhammad Azam & Yi Feng, 2022. "Does foreign aid stimulate economic growth in developing countries? Further evidence in both aggregate and disaggregated samples," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(2), pages 533-556, April.
    5. Guo, Jiaqi & Wang, Qiang & Li, Rongrong, 2024. "Can official development assistance promote renewable energy in sub-Saharan Africa countries? A matter of institutional transparency of recipient countries," Energy Policy, Elsevier, vol. 186(C).
    6. Perekunah .B. Eregha & Tope Rufus Oziegbe, 2016. "Official Development Assistance, Volatility And Per Capita Real Gdp Growth In Sub-Saharan African Countries: A Comparative Regional Analysis," Journal of Developing Areas, Tennessee State University, College of Business, vol. 50(4), pages 363-382, October-D.
    7. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    Full references (including those not matched with items on IDEAS)

    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. Dierk Herzer & Michael Grimm, 2012. "Does foreign aid increase private investment? Evidence from panel cointegration," Applied Economics, Taylor & Francis Journals, vol. 44(20), pages 2537-2550, July.
    2. Evelyn Wamboye & Abel Adekola & Bruno S. Sergi, 2014. "Foreign aid, legal origin, economic growth and Africa’s least developed countries," Progress in Development Studies, , vol. 14(4), pages 335-357, October.
    3. Tony Addison & George Mavrotas & Mark McGillivray, 2005. "Development assistance and development finance: evidence and global policy agendas," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(6), pages 819-836.
    4. Tim Röthel, 2023. "Budget support to the health sector—The right choice for strong institutions? Evidence from panel data," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 735-770, May.
    5. Mark McGillivray, 2005. "Réformer la formule : commentaires.Efficacité de l'aide et régimes de politiques économiques dans les pays receveurs," Revue d’économie du développement, De Boeck Université, vol. 13(2), pages 119-127.
    6. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00825816, HAL.
    7. Dierk Herzer & Oliver Morrissey, 2009. "The Long-Run Effect of Aid on Domestic Output," Discussion Papers 09/01, University of Nottingham, CREDIT.
    8. Ferreira, I.A.R. & Simoes, M.C.N., 2013. "Aid And Growth: A Comparative Study Between Sub-Saharan Africa And Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 113-132.
    9. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Development Aid and Growth in Transition Countries," World Development, Elsevier, vol. 66(C), pages 383-399.
    10. Mark McGillivray & Simon Feeny & Niels Hermes & Robert Lensink, 2005. "It Works; It Doesn't; It Can, But that Depends...: 50 Years of Controversy Over the Macroeconomic Impact of Development Aid," WIDER Working Paper Series RP2005-54, World Institute for Development Economic Research (UNU-WIDER).
    11. Guillaumont, Patrick & Guillaumont Jeanneney, Sylviane & Wagner, Laurent, 2017. "How to Take into Account Vulnerability in Aid Allocation Criteria and Lack of Human Capital as Well: Improving the Performance Based Allocation," World Development, Elsevier, vol. 90(C), pages 27-40.
    12. Michael A. Clemens, 2017. "The Meaning Of Failed Replications: A Review And Proposal," Journal of Economic Surveys, Wiley Blackwell, vol. 31(1), pages 326-342, February.
    13. B. Bhaskara Rao, 2010. "Time-series econometrics of growth-models: a guide for applied economists," Applied Economics, Taylor & Francis Journals, vol. 42(1), pages 73-86.
    14. Juliana Yael Milovich, 2018. "Does Aid Reduce Poverty?," OPHI Working Papers ophiwp122.pdf, Queen Elizabeth House, University of Oxford.
    15. Denizer, Cevdet & Kaufmann, Daniel & Kraay, Aart, 2013. "Good countries or good projects? Macro and micro correlates of World Bank project performance," Journal of Development Economics, Elsevier, vol. 105(C), pages 288-302.
    16. Hiroyuki Hino & Atsushi Iimi, 2008. "Aid Effectiveness Revisited: Comparative Studies of Modalities of Aid to Asia and Africa," Discussion Paper Series 218, Research Institute for Economics & Business Administration, Kobe University.
    17. Balázs Szent-Iványi, 2015. "Are Democratising Countries Rewarded with Higher Levels of Foreign Aid?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 65(4), pages 593-615, December.
    18. Jac C. Heckelman & Stephen Knack, 2008. "Foreign Aid and Market‐Liberalizing Reform," Economica, London School of Economics and Political Science, vol. 75(299), pages 524-548, August.
    19. Stijn Claessens & Danny Cassimon, 2007. "Empirical evidence on the new international aid architecture," WEF Working Papers 0026, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
    20. Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.

    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:gam:jjrfmx:v:18:y:2025:i:4:p:221-:d:1639077. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.