Advertisement

De Economist

, Volume 141, Issue 4, pp 543–562 | Cite as

Recipient government behavior and the effectiveness of development aid

  • Robert Lensink
Article

Summary

This paper assesses the effectiveness of development aid for a group of 21 Sub-Saharan African countries in the 1980s. The paper explicitly differentiates between the impact of aid on private savings and taxes on the one hand, and government consumption expenditures on the other. The paper shows that foreign aid has positively contributed to GNP growth of the African countries. However, it also appears that direct effects of aid on economic growth are counteracted by government behavior since governments relaxed their tax effort or increased their consumption expenditures.

Keywords

Direct Effect Economic Growth International Economic African Country Public Finance 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Cassen, R. and Associates,Does Aid Work, Oxford, 1986.Google Scholar
  2. Gang, I.N. and H.A. Khan, ‘Foreign Aid, Taxes, and Public Investment,’Journal of Development Economics, 34 (1991), pp. 355–369.Google Scholar
  3. Griffen, K., ‘Foreign Aid after the Cold War,’Development and Change, 22 (1991), pp. 645–685.Google Scholar
  4. Gupta, K.L. and M.A. Islam,Foreign Capital, Savings and Growth, Boston, 1983.Google Scholar
  5. Heller, P.S., ‘A Model of Public Fiscal Behaviour in Developing Countries: Aid, Investment and Taxation,”American Economic Review, 65 (1975), pp. 429–435.Google Scholar
  6. Husain, I. and K.W. Jun,Capital Flows to South Asian and ASEAN Economies, Policy Research Working Papers, WPS 842, The World Bank, Washington, D.C., January 1992.Google Scholar
  7. Landau, D., ‘Public Choice and Economic Aid,’Economic Development and Cultural Change, 38, (1990), pp. 559–577.CrossRefGoogle Scholar
  8. Lensink, R. and P.A.G. van Bergeijk, ‘Official Finance Requirements in the 1980s,’World Development, 19 (1991), pp. 497–510.CrossRefGoogle Scholar
  9. Mosley, P.,Overseas Aid: Its Defence and Reform, Brighton, 1987.Google Scholar
  10. Mosley, P., ‘Structural Adjustment: A General Overview, 1980–1989,’ in: V.N. Balasubramanyam and S. Lall (eds.),Current Issues in Development Economics, London, 1991, pp. 223–242.Google Scholar
  11. Mosley, P., J. Hudson and S. Horrell, ‘Aid, the Public Sector and the Market in Less Developed Countries,’Economic Journal, 97, (1987), pp. 616–641.Google Scholar
  12. OECD,Geographical Distribution of Financial Flows to Developing Countries, 1980/1983, Paris, 1985.Google Scholar
  13. OECD,Geographical Distribution of Financial Flows to Developing Countries, 1982/1985, Paris, 1987.Google Scholar
  14. OECD,Geographical Distribution of Financial Flows to Developing Countries, 1985/1988, Paris, 1990.Google Scholar
  15. Papanek, G.F., ‘Aid, Foreign Private Investment, Savings, and Growth in Less Developed Countries,’Journal of Political Economy, 81, (1973), pp. 121–130.Google Scholar
  16. Rana, P.B. and M. Dowling, ‘The Impact of Foreign Capital on Growth: Evidences From Asian Developing Countries,’The Developing Economies, 26 (1988), pp. 3–11.Google Scholar
  17. Rana, P.B. and M. Dowling, ‘Foreign Capital and Asian Economic Growth,’Asian Development Review, 8 (1990), pp. 77–102.Google Scholar
  18. Riddell, R.C.,Foreign Aid Reconsidered, Baltimore, 1987.Google Scholar
  19. Snyder, D., ‘Foreign Aid and Domestic Savings: A Spurious Correlation?,’Economic Development and Cultural Change, 39 (1990), pp. 175–183.CrossRefGoogle Scholar
  20. Weisskopf, T.E., ‘The Impact of Foreign Capital Inflow on Domestic Savings in Underdeveloped Countries,’Journal of International Economics, 2 (1972), pp. 25–38.CrossRefGoogle Scholar
  21. White, H., ‘The Macroeconomic Impact of Development Aid: A Critical Survey,’Journal of Development Studies, 28 (1992), pp. 163–240.Google Scholar
  22. World Bank,Adjustment Lending: An Evaluation of Ten Years Experience, Country Economics Department, Policy & Research Series, 1, Washington, D.C., 1988.Google Scholar
  23. World Bank,Annual Review of Evaluation Results, Operations Evaluation Department, 8164, Washington, D.C., 1989.Google Scholar
  24. World Bank,World Tables, 1989–90 Edition, Washington, D.C., 1990.Google Scholar

Copyright information

© Stenfert Kroese 1993

Authors and Affiliations

  • Robert Lensink
    • 1
  1. 1.Economics FacultyUniversity of GroningenGroningenThe Netherlands

Personalised recommendations