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Foreign Aid and Urbanization in Developing Countries

Author

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  • Kevin Sylwester

    (Department of Economics, Southern Illinois University¬°XCarbondale, U.S.A.)

Abstract

This paper examines whether developing countries receiving more foreign aid also have higher rates of urbanization. After presenting a simple theoretical model, empirical work is conducted on a cross-section of countries during the 1990s. The paper finds that foreign aid is positively associated with subsequent urbanization even after controlling for income levels, population, and regional characteristics. If this association is given a causal interpretation, the results indicate that foreign aid enlarges urban areas.

Suggested Citation

  • Kevin Sylwester, 2008. "Foreign Aid and Urbanization in Developing Countries," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 7(2), pages 153-166, August.
  • Handle: RePEc:ijb:journl:v:7:y:2008:i:2:p:153-166
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    References listed on IDEAS

    as
    1. Ravallion, Martin, 2002. "On the urbanization of poverty," Journal of Development Economics, Elsevier, pages 435-442.
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    3. Blackorby, Charles & Bossert, Walter & Donaldson, David, 1999. "Foreign aid and population policy: some ethical considerations," Journal of Development Economics, Elsevier, pages 203-232.
    4. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, pages 137-150.
    5. Ravallion, Martin, 2002. "On the urbanization of poverty," Journal of Development Economics, Elsevier, pages 435-442.
    6. Nyoni, Timothy S., 1998. "Foreign Aid and Economic Performance in Tanzania," World Development, Elsevier, vol. 26(7), pages 1235-1240, July.
    7. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    8. Shukla, Vibhooti & Stark, Oded, 1990. "Policy comparisons with an agglomeration effects-augmented dual economy model," Journal of Urban Economics, Elsevier, vol. 27(1), pages 1-15, January.
    9. Mallick, Sushanta & Moore, Tomoe, 2005. "Impact of World Bank lending in an adjustment-led growth model," Economic Systems, Elsevier, vol. 29(4), pages 366-383, December.
    10. Moomaw, Ronald L. & Shatter, Ali M., 1996. "Urbanization and Economic Development: A Bias toward Large Cities?," Journal of Urban Economics, Elsevier, vol. 40(1), pages 13-37, July.
    11. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
    12. Judith Giles, 1994. "Another look at the evidence on foreign aid led economic growth," Applied Economics Letters, Taylor & Francis Journals, vol. 1(11), pages 194-199.
    13. Jie Zhang, 2002. "Urbanization, population transition, and growth," Oxford Economic Papers, Oxford University Press, vol. 54(1), pages 91-117, January.
    14. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, pages 137-150.
    15. Donald W. Snyder, 1996. "Foreign aid and private investment in developing economies," Journal of International Development, John Wiley & Sons, Ltd., pages 735-745.
    16. Henderson, Vernon, 2003. "The Urbanization Process and Economic Growth: The So-What Question," Journal of Economic Growth, Springer, vol. 8(1), pages 47-71, March.
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    Citations

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    Cited by:

    1. Kablan, Sandrine, 2013. "Foreign Aid, Green Cities and Buildings," WIDER Working Paper Series 048, World Institute for Development Economic Research (UNU-WIDER).
    2. Ahmad, Khalil & Ali, Amjad & Irfan Chani, Muhammad, 2014. "Does sector specific foreign aid matter for fertility? An empirical analysis form Pakistan," MPRA Paper 72851, University Library of Munich, Germany.
    3. repec:ijb:journl:v:16:y:2017:i:1:p:49-74 is not listed on IDEAS

    More about this item

    Keywords

    foreign aid; urbanization;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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