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On the effect of foreign aid on corruption

Author

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  • Asongu Simplice

    (Yaoundé/Cameroun)

Abstract

The Okada & Samreth(2012, EL) finding that aid deters corruption could have an important influence on policy and academic debates. This paper partially negates their criticism of the mainstream approach to the aid-development nexus. Using updated data(1996-2010) from 52 African countries we provide robust evidence of a positive aid-corruption nexus. Development assistance fuels(mitigates) corruption(the control of corruption) in the African continent. As a policy implication, the Okada & Samreth(2012, EL) finding for developing countries may not be relevant for Africa.

Suggested Citation

  • Asongu Simplice, 2012. "On the effect of foreign aid on corruption," Working Papers of the African Governance and Development Institute. 12/031, African Governance and Development Institute..
  • Handle: RePEc:agd:wpaper:12/031
    as

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    References listed on IDEAS

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    1. repec:hrv:faseco:30728041 is not listed on IDEAS
    2. Billger, Sherrilyn M. & Goel, Rajeev K., 2009. "Do existing corruption levels matter in controlling corruption?: Cross-country quantile regression estimates," Journal of Development Economics, Elsevier, vol. 90(2), pages 299-305, November.
    3. La Porta, Rafael & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," Journal of Finance, American Finance Association, vol. 52(3), pages 1131-1150, July.
    4. Okada, Keisuke & Samreth, Sovannroeun, 2012. "The effect of foreign aid on corruption: A quantile regression approach," Economics Letters, Elsevier, vol. 115(2), pages 240-243.
    5. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Foreign Aid; Political Economy; Development; Africa;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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