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The Impacts Of Biased Resource Allocation On The Effectiveness Of Official Development Assistance

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  • SUNG-KO LI

    (Department of Economics, Hong Kong Baptist University, The Wing Lung Bank Building for Business Studies, 34 Renfrew Road, Kowloon Tong, Kowloon, Hong Kong, P. R. China)

  • CHUN-KEI TSANG

    (Department of Economics, Hong Kong Baptist University, Hong Kong, P. R. China3Business, Economic and Public Policy Research Centre, Hong Kong Shue Yan University, Hong Kong, P. R. China)

Abstract

Many developing countries are receiving official development assistance (ODA). Whether ODA is beneficial or harmful to the receiving country is controversial in the literature. This paper analyzes this issue from a new angle by adopting the framework of competitiveness which allows us to link resource allocation with economic growth. Under this framework, we point out that the mechanism of resource allocation influences the effectiveness of ODA on economic growth. By applying data envelopment analysis (DEA) to competitiveness, we capture the effects of inefficient and biased allocation of resources on ODA. The data confirm the co-existence of positive and negative impacts of ODA. Finally, we conclude that current ODA is not efficient in helping most of the receiving countries.

Suggested Citation

  • Sung-Ko Li & Chun-Kei Tsang, 2020. "The Impacts Of Biased Resource Allocation On The Effectiveness Of Official Development Assistance," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(01), pages 239-256, March.
    • Handle: RePEc:wsi:serxxx:v:65:y:2020:i:01:n:s0217590818500285
    DOI: 10.1142/S0217590818500285
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    Cited by:

    1. James Ang, 2020. "Editorial: Special Issue On Economic Growth," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(01), pages 1-2, March.

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