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Impact of Project and Programme Aid on Economic Growth: A Cross Country Analysis

Author

Listed:
  • Pervez Zamurrad Janjua

    (Department of Economics, Preston University, Islamabad)

  • Malik Muhammad

    (International Institute of Islamic Economics, International Islamic University, Islamabad.)

  • Muhammad Usman

    (International Institute of Islamic Economics, International Islamic University, Islamabad.)

Abstract

This study examines the impact of foreign aid instruments, namely Project Aid and Programme Aid, on economic growth of 27 aid-receiving countries. The study constructs a system of three equations, i.e. growth, investment and human capital. Using the Generalised Method of Moment estimation technique, the study concludes that while Project Aid has a positive and significant impact on economic growth, Programme Aid has an insignificant impact on economic growth. Additionally, the study finds that economic policies do enhance effectiveness of aid at aggregate level. Therefore, the capacity of aid-recipient countries to effectively use their resources for economic development needs due consideration.

Suggested Citation

  • Pervez Zamurrad Janjua & Malik Muhammad & Muhammad Usman, 2018. "Impact of Project and Programme Aid on Economic Growth: A Cross Country Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 57(2), pages 145-174.
    • Handle: RePEc:pid:journl:v:57:y:2018:i:2:p:145-174
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    References listed on IDEAS

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