Does aid dependance worsen governance?
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Authors
Ear, Sophal
Subjects
Advisors
Date of Issue
2007
Date
Publisher
Taylor & Francis
Language
Abstract
Aid dependence has been linked in the literature with worsening quality of governance. Using Kaufmann et al.'s six dimensions of governance ( Voice and Accountability, Political Stability, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption). this article reinvestigates this relationship with new data and a more robust methodology. Under pooled Time Series Cross-Sectional (panel data) analysis, only the Rule of Law appears to have a negative relationship with aid, and at only the 0.10 significance level. To control for potential endogeneity and reverse causality, aid is lagged and subsequently instrumented. Potential omitted variables bias is controlled with a fixed effects model. Components of aid such as technical
cooperation and average grant element are also explored. Findings suggest that aid can play a positive role when its components are considered and that the causal link between aid dependence and worsening quality of governance may be tenuous at best and sensiĀtive to alternative specifications.
Type
Article
Description
The article of record as published may be found at http://dx.doi.org/10.1080/10967490701515580
Series/Report No
Department
National Security Affairs
Organization
Naval Postgraduate School (U.S.)
Identifiers
NPS Report Number
Sponsors
Funder
Format
28 p.
Citation
International Public Management Journal, v.10, no.3 (2007), pp. 259-286
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.