The reality about aid and governance: the threshold theory
The aim of this survey is to explain the real impact of aid on governance in the developing countries: including the subsahara and the MENA region during the period 1990-2004 by using the “threshold theory”. Stephen Knack proved that foreign aid had a harmful impact on the governance of the developing countries. But, in this study we used a new econometric approach to test the existence of a threshold and to determine its value. This methodology allowed us to find interesting results in the relation between aid and governance, in the short and in the long run.
|Date of creation:||10 Feb 2011|
|Date of revision:||01 Apr 2011|
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- Henrik Hansen & Finn Tarp, 2000.
"Aid effectiveness disputed,"
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IDB Publications (Working Papers)
6447, Inter-American Development Bank.
- Chang, Charles C. & Fernandez-Arias, Eduardo & Serven, Luis, 1999. "Measuring aid flows : a new approach," Policy Research Working Paper Series 2050, The World Bank.
- Charles C. Chang & Eduardo Fernández-Arias & Luis Serven, 1998. "Measuring Aid Flows: A New Approach," Research Department Publications 4146, Inter-American Development Bank, Research Department.
- Bruce E. Hansen, 2000.
"Sample Splitting and Threshold Estimation,"
Econometric Society, vol. 68(3), pages 575-604, May.
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