IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0261510.html
   My bibliography  Save this article

How foreign aid and remittances affect poverty in MENA countries?

Author

Listed:
  • Riyazuddin Khan
  • Zeeshan
  • Mohammad Imdadul Haque
  • Neha Gupta
  • Mohammad Rumzi Tausif
  • Isha Kaushik

Abstract

Foreign aid and remittances augment the income of economies. The present study examines the relationship between economic growth, poverty, inequality, remittances, and foreign aid in the Middle East and North Africa (MENA) countries using panel data methods from 1991 to 2019. The study focuses on the MENA region due to the rise in labor immigration and significant foreign aid. The empirical findings reveal that remittances, foreign aid, and economic growth play a significant role in bringing down the MENA region’s poverty levels. Besides, a rise in income share accruing to the lowest quintile is observed despite the negative income growth, which indicates that on average, the income increased more rapidly of the poor in comparison to the non-poor households. Thus, the study finds evidence supporting the hypothesis that remittances and foreign aid augment per capita income and income share in the MENA member countries.

Suggested Citation

  • Riyazuddin Khan & Zeeshan & Mohammad Imdadul Haque & Neha Gupta & Mohammad Rumzi Tausif & Isha Kaushik, 2022. "How foreign aid and remittances affect poverty in MENA countries?," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-20, January.
    • Handle: RePEc:plo:pone00:0261510
    DOI: 10.1371/journal.pone.0261510
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0261510
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0261510&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0261510?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adams, Richard Jr. & Page, John, 2005. "Do international migration and remittances reduce poverty in developing countries?," World Development, Elsevier, vol. 33(10), pages 1645-1669, October.
    2. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    3. Giuliano, Paola & Ruiz-Arranz, Marta, 2009. "Remittances, financial development, and growth," Journal of Development Economics, Elsevier, vol. 90(1), pages 144-152, September.
    4. Abdur Chowdhury & Paolo Garonna, 2007. "Effective Foreign Aid, Economic Integration and Subsidiarity: Lessons from Europe," ECE Discussion Papers Series 2007_2, UNECE.
    5. Mr. Dhaneshwar Ghura & Mr. Michael T. Hadjimichael, 1995. "Growth in Sub-Saharan Africa," IMF Working Papers 1995/136, International Monetary Fund.
    6. Papanek, Gustav F, 1973. "Aid, Foreign Private Investment, Savings, and Growth in Less Developed Countries," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 120-130, Jan.-Feb..
    7. Gastwirth, Joseph L, 1972. "The Estimation of the Lorenz Curve and Gini Index," The Review of Economics and Statistics, MIT Press, vol. 54(3), pages 306-316, August.
    8. Arndt Channing & Jones Sam & Tarp Finn, 2010. "Aid, Growth, and Development: Have We Come Full Circle?," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-29, December.
    9. Alberto Chong & Mark Gradstein & Cecilia Calderon, 2009. "Can foreign aid reduce income inequality and poverty?," Public Choice, Springer, vol. 140(1), pages 59-84, July.
    10. Michael T. Gapen & Mr. Ralph Chami & Mr. Peter J Montiel & Mr. Adolfo Barajas & Connel Fullenkamp, 2009. "Do Workers’ Remittances Promote Economic Growth?," IMF Working Papers 2009/153, International Monetary Fund.
    11. Bruno, Michael & Ravallion, Martin & Squire, Lyn, 1996. "Equity and growth in developing countries : old and new perspectives on the policy issues," Policy Research Working Paper Series 1563, The World Bank.
    12. Oliver Morrissey, 2001. "Does aid increase growth?," Progress in Development Studies, , vol. 1(1), pages 37-50, January.
    13. Tajul Ariffin Masron & Yogeeswari Subramaniam, 2018. "Remittance and poverty in developing countries," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 17(3), pages 305-325, June.
    14. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer.
    15. Mark McGillivray & Simon Feeny & Niels Hermes & Robert Lensink, 2006. "Controversies over the impact of development aid: it works; it doesn't; it can, but that depends …," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(7), pages 1031-1050.
    16. Liutang Gong & Heng‐fu Zou, 2001. "Foreign Aid Reduces Labor Supply and Capital Accumulation," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 105-118, February.
    17. Simeon Djankov & Jose G. Montalvo & Marta Reynal-Querol, 2006. "Does Foreign Aid Help," Cato Journal, Cato Journal, Cato Institute, vol. 26(1), pages 1-28, Winter.
    18. Gyan Pradhan & Mukti Upadhyay & Kamal Upadhyaya, 2008. "Remittances and economic growth in developing countries," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(3), pages 497-506.
    19. Arndt Channing & Jones Sam & Tarp Finn, 2010. "Aid, Growth, and Development: Have We Come Full Circle?," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-29, December.
    20. Amuedo-Dorantes, Catalina & Pozo, Susan, 2004. "Workers' Remittances and the Real Exchange Rate: A Paradox of Gifts," World Development, Elsevier, vol. 32(8), pages 1407-1417, August.
    21. Thitithep Sitthiyot & Kanyarat Holasut, 2020. "A simple method for measuring inequality," Palgrave Communications, Palgrave Macmillan, vol. 6(1), pages 1-9, December.
    22. Mercy. T. Musakwa & N. M. Odhiambo, 2019. "THE impact of remittance inflows on poverty in Botswana: an ARDL approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-13, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael Keller & Francis Mulangu, 2024. "Island idleness: Investigating the impact of remittances on labour market participation in Comoros," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 677-709, January.
    2. Titus Ayobami Ojeyinka & Cleopatra Oluseye Ibukun, 2024. "Do remittances mitigate poverty? Evidence from selected countries in Africa, Asia and Latin America," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-28, June.

    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. Gloria Clarissa O. Dzeha, 2016. "The decipher, theory or empirics: a review of remittance studies," African Journal of Accounting, Auditing and Finance, Inderscience Enterprises Ltd, vol. 5(2), pages 113-134.
    2. 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.
    3. Christian EBEKE, 2010. "Remittances, Value Added Tax and Tax Revenue in Developing Countries," Working Papers 201030, CERDI.
    4. Joaquin Morales Belpaire, 2012. "Decentralized Aid and Democracy," Working Papers 1212, University of Namur, Department of Economics.
    5. Mohammad Salahuddin & Jeff Gow, 2015. "The relationship between economic growth and remittances in the presence of cross-sectional dependence," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(1), pages 207-221, January-M.
    6. Katarina Juselius & Niels Framroze Møller & Finn Tarp, 2014. "The Long-Run Impact of Foreign Aid in 36 African Countries: Insights from Multivariate Time Series Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(2), pages 153-184, April.
    7. Jean-Louis Combes & Christian Hubert Ebeke & Mathilde Maurel & Urbain Thierry Yogo, 2011. "Remittances and the prevalence of working poor," Post-Print halshs-00587797, HAL.
    8. Sonia Afrin Ale & Rasheda Akter & MD. Shafiqul Islam, 2018. "Remittance Inflow and GDP Growth: Evidence from Bangladesh, India and Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(11), pages 1340-1353, November.
    9. Md. Saiful Islam, 2022. "Do personal remittances influence economic growth in South Asia? A panel analysis," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 242-258, February.
    10. Tiwari Aviral Kumar, 2011. "Foreign Aid, FDI, Economic Freedom and Economic Growth in Asian Countries," Global Economy Journal, De Gruyter, vol. 11(3), pages 1-28, September.
    11. Shaomeng Jia & Claudia R. Williamson, 2019. "Aid, Policies, And Growth: Why So Much Confusion?," Contemporary Economic Policy, Western Economic Association International, vol. 37(4), pages 577-599, October.
    12. Imai, Katsushi S. & Gaiha, Raghav & Ali, Abdilahi & Kaicker, Nidhi, 2014. "Remittances, growth and poverty: New evidence from Asian countries," Journal of Policy Modeling, Elsevier, vol. 36(3), pages 524-538.
    13. Farroukh, Arafet & Mazioued, Manel & Pédussel Wu, Jennifer, 2024. "Revisiting the linkage between remittances inflow and economic growth: A semi-parametric estimation with panel data," IPE Working Papers 238/2024, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    14. Munim K. Barai, 2012. "Development Dynamics of Remittances in Bangladesh," SAGE Open, , vol. 2(1), pages 21582440124, January.
    15. Taiwo, Kayode, 2020. "Do remittances spur economic growth in Africa?," MPRA Paper 111029, University Library of Munich, Germany, revised 2021.
    16. Sarantis Kalyvitis & Thanasis Stengos & Irene Vlachaki, 2012. "Are Aid Flows Excessive or Insufficient? Estimating the Growth Impact of Aid in Threshold Regressions," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(3), pages 298-315, July.
    17. Boris Fisera & Menbere Workie Tiruneh, 2023. "Beyond the Balassa-Samuelson Effect: Do Remittances Trigger the Dutch Disease?," Eastern European Economics, Taylor & Francis Journals, vol. 61(1), pages 23-65, January.
    18. Mark McGillivray & David Fielding & Sebastian Torres & Stephen Knowles, 2011. "Does Aid Work for the Poor?," Working Papers 1114, University of Otago, Department of Economics, revised Dec 2011.
    19. Ismahene Yahyaoui & Najeh Bouchoucha, 2020. "Foreign Aid-Growth Nexus in Africa: Do Institutions Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(4), pages 1663-1689, December.
    20. Arndt Channing & Jones Sam & Tarp Finn, 2010. "Aid, Growth, and Development: Have We Come Full Circle?," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-29, December.

    More about this item

    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:plo:pone00:0261510. 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: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    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.