Does foreign aid impede economic complexity in developing countries?
| Autor: | Brice Kamguia, Sosson Tadadjeu, Clovis Miamo, Henri Njangang |
|---|---|
| Rok vydání: | 2022 |
| Předmět: |
education.field_of_study
Institutional development Economic complexity Corporate governance media_common.quotation_subject Population Developing country General Business Management and Accounting Democracy Order (exchange) Development economics Economics education General Economics Econometrics and Finance Developed country media_common |
| Zdroj: | International Economics. 169:71-88 |
| ISSN: | 2110-7017 |
| DOI: | 10.1016/j.inteco.2021.10.004 |
| Popis: | Foreign aid is one of the most important policy tools that developed countries used to help poor countries improve population well-being and facilitate economic and institutional development. However, the effectiveness of aid as an instrument of development has been questioned several times, especially for its deleterious effects on governance. This study examines the effect of foreign aid on economic complexity in developing countries. Using annual data for 78 developing countries over the period 1990-2017, the empirical findings show that foreign aid exerts a negative effect on economic complexity. Although the effect of aid on economic complexity differs across donors, we also find a U-shaped relationship between foreign aid and economic complexity. In addition, the empirical results of this paper show that democracy mitigates the negative effect of foreign aid on economic complexity. Thus, in order to benefit from the effects of foreign aid for better economic complexity, the governments of developing countries would benefit from putting more effort into improving democracy. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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