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Does Foreign Aid Affect The Environment In Developing Economies?

  • B. Mak Arvin


    (Department of Economics, Trent University)

  • Parviz Dabir-Alai

    (Department of Economics, Richmond University)

  • Byron Lew

    (Department of Economics, Trent University)

Preserving the environment is important from both national and international perspectives. Similarly, the provision of foreign assistance from richer to poorer nations is often seen as an imperative. However, there is a noticeable gap in research on how aid flows are linked to the environment in developing economies. Using the method of Granger causality, this paper explores the possible linkages. Results indicate that the external debt of a developing country bears upon the relationship in important ways. The second part of the paper entertains the possibility of spurious causality, tests for cointegration, and present additional results using an error-correction model.

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Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

Volume (Year): 31 (2006)
Issue (Month): 1 (June)
Pages: 63-87

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Handle: RePEc:jed:journl:v:31:y:2006:i:1:p:63-87
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