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Aid and Growth in Malawi

Listed author(s):
  • Daniel Chris Khomba

    (University of St Andrews)

  • Alex Trew

    ()

    (University of St Andrews)

We study the impact on the growth of foreign aid flows to districts in Malawi over the period 2000–13. To isolate a causal impact on growth, we employ two exogenous determinants of within-country aid disbursement: First, the ethnic affinity of a district with the sitting President; second, the portion of Parliamentarians in a district that are susceptible into induced political defections. Using these instru- ments, alone or together, we identify a robust and quantitatively significant role for aid flows in causing higher growth in light density. We find a hump-shaped growth response over the course of three years. Bilateral aid appears to be better in causing growth than multilateral aid while grants have more impact than loans.

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File URL: http://www.st-andrews.ac.uk/~wwwecon/repecfiles/4/1612.pdf
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Paper provided by Department of Economics, University of St. Andrews in its series Discussion Paper Series, Department of Economics with number 201612.

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Date of creation: 04 Nov 2016
Date of revision: 14 Jun 2017
Handle: RePEc:san:wpecon:1612
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