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Does aid unpredictability weaken governance? Evidence from developing countries

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  • Thierry Kangoye

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper examines the effects of aid on governance from a different perspective by asserting that aid unpredictability can potentially increase corruption in recipient countries by providing incentives to risk-averse and corrupt political leaders to engage in rent-seeking activities. Analyses of data from 80 developing countries over the period 1984-2004 offer evidence that higher aid unpredictability is associated with more corruption as measured by a synthetic index. We also find further evidence that this latter impact is more severe in countries with weak initial institutional conditions. These findings are a supplementary advocacy for the need for better management and better predictability of aid flow in developing countries.

Suggested Citation

  • Thierry Kangoye, 2013. "Does aid unpredictability weaken governance? Evidence from developing countries," Post-Print halshs-00843756, HAL.
  • Handle: RePEc:hal:journl:halshs-00843756
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00843756
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    Citations

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    Cited by:

    1. Asongu, Simplice & Nwachukwu, Jacinta, 2016. "Is the Threat of Foreign Aid Withdrawal an Effective Deterrent to Political Oppression? Evidence from 53 African Countries," MPRA Paper 74649, University Library of Munich, Germany.
    2. Kohnert, Dirk, 2015. "Donor’s double talk undermines African agency : Comparative study of civic agency in Burkina Faso and Togo," EconStor Conference Papers 120921, ZBW - German National Library of Economics.
    3. Asongu, Simplice, 2015. "Growth and Institutions in African Development by Augustin K. Fosu," MPRA Paper 68656, University Library of Munich, Germany.
    4. repec:eee:riibaf:v:42:y:2017:i:c:p:1355-1366 is not listed on IDEAS
    5. Simplice Asongu & Ivo Leke, 2017. "External Flows and Inclusive Human Development in Sub-Saharan Africa," Working Papers 17/058, African Governance and Development Institute..
    6. repec:bla:socsci:v:98:y:2017:i:1:p:282-298 is not listed on IDEAS
    7. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Foreign Aid and Inclusive Development: Updated Evidence from Africa, 2005–2012," Social Science Quarterly, Southwestern Social Science Association, vol. 98(1), pages 282-298, March.
    8. Tchamyou, Vanessa S. & Asongu, Simplice A., 2017. "Conditional market timing in the mutual fund industry," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1355-1366.
    9. Asongu, Simplice A. & Koomson, Isaac & Tchamyou, Vanessa S., 2017. "Financial globalisation uncertainty/instability is good for financial development," Research in International Business and Finance, Elsevier, vol. 41(C), pages 280-291.
    10. Asongu, Simplice & Efobi, Uchenna & Tchamyou, Vanessa, 2016. "Globalization and Governance: A Critical Contribution to the Empirics," MPRA Paper 74229, University Library of Munich, Germany.
    11. Vanessa Tchamyou & Simplice Asongu & Jacinta Nwachukwu, 2018. "Effects of asymmetric information on market timing in the mutual fund industry," Working Papers 18/007, African Governance and Development Institute..
    12. Jones, Sam & Tarp, Finn, 2016. "Does foreign aid harm political institutions?," Journal of Development Economics, Elsevier, vol. 118(C), pages 266-281.
    13. repec:kap:jincot:v:17:y:2017:i:3:d:10.1007_s10842-016-0240-1 is not listed on IDEAS
    14. Menard, Audrey-Rose & Weill, Laurent, 2016. "Understanding the link between aid and corruption: A causality analysis," Economic Systems, Elsevier, vol. 40(2), pages 260-272.
    15. Asongu, Simplice A & Nwachukwu, Jacinta C., 2015. "Foreign aid instability and bundled governance dynamics in Africa," MPRA Paper 71783, University Library of Munich, Germany.
    16. Asongu, Simplice & Tchamyou, Vanessa & Asongu, Ndemaze & Tchamyou, Nina, 2017. "Fighting terrorism in Africa: evidence from bundling and unbundling institutions," MPRA Paper 84342, University Library of Munich, Germany.
    17. Simplice A. Asongu & Jacinta C. Nwachukwu, 2016. "Rational Asymmetric Development, Piketty and Poverty in Africa," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 13(2), pages 221-246, December.
    18. Simplice Asongu & Jacinta C. Nwachukwu, 2015. "Foreign aid volatility and lifelong learning: demand-side empirics to a textual literature," Working Papers 15/016, African Governance and Development Institute..
    19. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Fighting Capital Flight in Africa: Evidence from Bundling and Unbundling Governance," Journal of Industry, Competition and Trade, Springer, vol. 17(3), pages 305-323, September.
    20. Simplice Asongu, 2015. "Rational Asymmetric Development, Piketty and the Spirit of Poverty in Africa," Working Papers 15/006, African Governance and Development Institute..

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