Aid, Policies, and Growth

2000 ◽  
Vol 90 (4) ◽  
pp. 847-868 ◽  
Author(s):  
Craig Burnside ◽  
David Dollar
Keyword(s):  
Developing Countries ◽  
Foreign Aid ◽  
Positive Impact ◽  
Trade Policies ◽  
Economic Policies ◽  
Per Capita Gdp ◽  
Small Impact ◽  
Per Capita ◽  
Good Policy

This paper uses a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth of per capita GDP. We find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies. Good policies are ones that are themselves important for growth. The quality of policy has only a small impact on the allocation of aid. Our results suggest that aid would be more effective if it were more systematically conditioned on good policy. (JEL F350, O230, O400)

A tale of the financial inclusion-growth nexus and the degree of financial inclusion: a dynamic panel approach on selected developing countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Biplob Kumar Nandi ◽  
Gazi Quamrul Hasan ◽  
Md. Humayun Kabir
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Developing Economies ◽  
Positive Impact ◽  
Financial Inclusion ◽  
Per Capita Gdp ◽  
Content Type ◽  
Medium Level ◽  
Per Capita ◽  
High Level

Purpose This study aims to examine the impact of financial inclusion on per capita gross domestic product (GDP) at varying degrees of financial inclusion for a sample of 76 developing countries between 2011 and 2017. To evaluate the heterogeneous impact, this paper constructs the multi-dimension index of financial inclusion to classify sample countries into two sub-samples in terms of the value of FIID, taking account of three dimensions of financial inclusion: access, usage and availability. Design/methodology/approach This study attempts to identify the presence of reverse causality and long-run relationship between financial inclusion and economic growth by using the Granger causality test (Wald test) and three alternative panel cointegration tests (Kao Test, Pedroni Test, Westerlund Test) respectively. Because of the existence of the bi-directional causality between financial inclusion and per capita GDP, this study uses a fixed effect instrumental variable model with lagged dependent variable to get unbiased estimators from the panel regressions for sample countries. Findings This paper finds a strong positive impact of financial inclusion on per capita GDP growth in sample developing countries, controlling for labor market structure, financial institutions’ efficacy, infrastructural and governance issues. This study suggests that economic growth will be high in developing economies with a higher level of financial inclusion; however, the positive impact for two sub-samples countries (low and medium level of inclusion and high level of inclusion) are heterogeneous. The estimated result explains that a 1% increase in the financial inclusion index leads to a 0.0153% point increase in the per capita GDP for the countries with a low and medium level of financial inclusion, while this positive impact is significantly higher, 0.0794% point for countries with the high level of financial inclusion. This study also suggests that the higher concentration in the financial market by few agents and the lower level of governance may have an adverse impact on economic growth for the economies with a low and medium level of financial inclusion. Originality/value This study is an original study that contributes to the research gap by explaining the heterogeneous impact of financial inclusion on economic growth at varying degrees of inclusion in the two sub-sample countries. Moreover, this study posits greater appeal as it explores the issue using the sample of only developing economies.

scholarly journals The Impact of Foreign Aid on Economic Growth in Ethiopia

2012 ◽  
Vol 13 (2) ◽  
pp. 87-112
Author(s):  
Mohammed Seid Hussen ◽  
Kye Woo Lee
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Positive Impact ◽  
Aid Effectiveness ◽  
Gdp Growth ◽  
Domestic Investment ◽  
Per Capita Gdp ◽  
Democratic Regimes ◽  
Per Capita ◽  
The Impact

This paper investigates the impact of foreign aid on investment and economic growth of Ethiopia for the period 1971-2010. The result indicates that foreign aid has a statistically significant positive impact on domestic investment, while aid’s positive impact on per capita GDP growth does not depend on any macroeconomic policy conditionality. Rather, aid effectiveness depends on the peculiar social, political and economic institutions of particular periods. Aid is effective during both socialist and democratic regimes. However, aid’s impact on growth was greater for socialist regimes.

scholarly journals The Effect of Education Expenditure on Per Capita GDP in Developing Countries

2017 ◽  
Vol 9 (10) ◽  
pp. 136
Author(s):  
Elizabeth N. Appiah
Keyword(s):  
Developing Countries ◽  
Positive Impact ◽  
Private Investment ◽  
Education Expenditure ◽  
Public And Private ◽  
Per Capita Gdp ◽  
Per Capita ◽  
Sub Saharan ◽  
The Impact ◽  
Ssa Countries

Is further public and private investment in education warranted in developing countries that is economically efficient? Does an increase in education expenditure, generate a positive impact on per capita GDP in developing countries? If so, is the impact different from that of Sub-Saharan African (SSA) countries? Education is one of the key factors of promoting economic growth because of its role in enhancing human capital thus productivity. However, adverse macroeconomic conditions and increased competition for scarce public funds have reduced governments’ capacity to expand education expenditure to improve labor productivity. I use the ‘system’ GMM estimator to estimate the effect of an increase in education expenditure on per capita GDP. The uniqueness of this paper is that unlike other studies where only one country or region is considered, this paper examines the impact of increased spending on education on per capita GDP in developing countries. The findings indicate that expansion in education expenditure in developing countries affects per per capita GDP positively, and the effect is not different from that of SSA countries.

Railroad Integration and Uneven Development on the European Periphery, 1870–1910

2021 ◽  
Vol 45 (2) ◽  
pp. 261-289
Author(s):  
Eduard J. Alvarez-Palau ◽  
Alfonso Díez-Minguela ◽  
Jordi Martí-Henneberg
Keyword(s):  
Economic Development ◽  
Positive Impact ◽  
Data Set ◽  
Per Capita Gdp ◽  
Catching Up ◽  
Nation States ◽  
Railroad Network ◽  
Per Capita ◽  
European Periphery ◽  
The Relationship

AbstractThis study explores the relationship between railroad integration and regional development on the European periphery between 1870 and 1910, based on a regional data set including 291 spatial units. Railroad integration is proxied by railroad density, while per capita GDP is used as an indicator of economic development. The period under study is of particular relevance as it has been associated with the second wave of railroad construction in Europe and also coincides with the industrialization of most of the continent. Overall, we found that railroads had a significant and positive impact on the growth of per capita GDP across Europe. The magnitude of this relationship appears to be relatively modest, but the results obtained are robust with respect to a number of different specifications. From a geographical perspective, we found that railroads had a significantly greater influence on regions located in countries on the northern periphery of Europe than in other outlying areas. They also helped the economies of these areas to begin the process of catching up with the continent’s industrialized core. In contrast, the regions on the southern periphery showed lower levels of economic growth, with this exacerbating the preexisting divergence in economic development. The expansion of the railroad network in them was unable to homogenize the diffusion of economic development and tended to further benefit the regions that were already industrialized. In most of the cases, the capital effect was magnified, and this contributed to the consolidation of newly created nation-states.

scholarly journals Impact of unemployment and income on entrepreneurship in post-apartheid South Africa: 1994–2015

2018 ◽  
Vol 10 (1) ◽  
Author(s):  
Darma Mahadea ◽  
Irrshad Kaseeram
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Employment Growth ◽  
Positive Impact ◽  
Early Stage ◽  
National Development ◽  
Entrepreneurial Activity ◽  
Per Capita Gdp ◽  
Per Capita ◽  
The Impact

Background: South Africa has made significant progress since the dawn of democracy in 1994. It registered positive economic growth rates and its real gross domestic product (GDP) per capita increased from R42 849 in 1994 to over R56 000 in 2015. However, employment growth lagged behind GDP growth, resulting in rising unemployment. Aim and setting: Entrepreneurship brings together labour and capital in generating income, output and employment. According to South Africa’s National Development Plan, employment growth would come mainly from small-firm entrepreneurship and economic growth. Accordingly, this article investigates the impact unemployment and per capita income have on early stage total entrepreneurship activity (TEA) in South Africa, using data covering the 1994–2015 period. Methods: The methodology used is the dynamic least squares regression. The article tests the assertion that economic growth, proxied by real per capita GDP income, promotes entrepreneurship and that high unemployment forces necessity entrepreneurship. Results: The regression results indicate that per capita real GDP, which increases with economic growth, has a highly significant, positive impact on entrepreneurial activity, while unemployment has a weaker effect. A 1% rise in real per capita GDP results in a 0.16% rise in TEA entrepreneurship, and a 1% rise in unemployment is associated with a 0.25% rise in TEA. Conclusion: There seems to be a strong pull factor, from income growth to entrepreneurship and a reasonable push from unemployment to entrepreneurship, as individuals without employment are forced to self-employment as a necessity, survival mechanism. Overall, a long-run co-integrating relationship seems plausible between unemployment, income and entrepreneurship in South Africa.

scholarly journals The Winner Takes It All: International Inequality in Communication and Media Studies Today

2018 ◽  
Vol 96 (1) ◽  
pp. 37-59 ◽  
Author(s):  
Marton Demeter
Keyword(s):  
Developing Countries ◽  
Media Studies ◽  
English Language ◽  
Web Of Science ◽  
Developed Countries ◽  
Natural Sciences ◽  
Per Capita Gdp ◽  
International Inequality ◽  
Publication Patterns ◽  
Per Capita

In this research, we analyzed all 79 Web of Science (WoS) indexed journals in communication and media studies to disclose main publication patterns. We found that English-language countries dominate the field in a greater extent than in other disciplines, and developing countries are in a weaker position than English-language developed countries not just in natural sciences but also in soft sciences. We found significant correlations between the nominal GDP, the per capita publication, and per capita GDP of a given country and its publication scores.

The Impact of Infrastructure on Growth in Developing Countries

2017 ◽  
pp. 40-68 ◽  
Author(s):  
Derya Yılmaz ◽  
Işın Çetin
Keyword(s):  
Developing Countries ◽  
Instrumental Variables ◽  
Dynamic Panel Data ◽  
Gdp Growth ◽  
Per Capita Gdp ◽  
Gdp Growth Rate ◽  
Generating Capacity ◽  
Catch Up ◽  
Per Capita ◽  
The Impact

Infrastructure and growth nexus has been debated in the literature since 1980s. This debate has a vital importance for the sake of developing countries. These countries need to grow faster in order to catch-up their advanced counterparts. Thus, it is important to detect the effect of infrastructure on growth. Bearing in mind this fact, we develop a standard growth regression in this present chapter using per capita GDP growth rate as a dependent variable. Infrastructure is added to the model as an index constructed from the indicators of infrastructure: total electric generating capacity, total telephone lines and the length of road network. We also employ set of instrumental variables comprising 29 developing countries between 1990 and 2014. In order to estimate our dynamic panel data we prefer GMM estimators. According to our empirical analysis, we can claim that infrastructure has a positive and significant impact on growth. But this impact is smaller than the earlier studies predict.

scholarly journals Impacts from Economic Development and Environmental Factors on Life Expectancy: A Comparative Study Based on Data from Both Developed and Developing Countries from 2004 to 2016

2021 ◽  
Vol 18 (16) ◽  
pp. 8559
Author(s):  
Zhiheng Chen ◽  
Yuting Ma ◽  
Junyi Hua ◽  
Yuanhong Wang ◽  
Hongpeng Guo
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Gini Coefficient ◽  
Negative Impact ◽  
Positive Impact ◽  
Developed Countries ◽  
Environmental Indicators ◽  
Gdp Per Capita ◽  
Per Capita ◽  
Urbanization Rate

Both economic development level and environmental factors have significant impacts on life expectancy at birth (LE). This paper takes LE as the research object and selects nine economic and environmental indicators with various impacts on LE. Based on a dataset of economic and environmental indicators of 20 countries from 2004 to 2016, our research uses the Pearson Correlation Coefficient to evaluate the correlation coefficients between the indicators, and we use multiple regression models to measure the impact of each indicator on LE. Based on the results from models and calculations, this study conducts a comparative analysis of the influencing mechanisms of different indicators on LE in both developed and developing countries, with conclusions as follow: (1) GDP per capita and the percentage of forest area to land area have a positive impact on LE in developed countries; however, they have a negative impact on LE in developing countries. Total public expenditure on education as a percentage of GDP and fertilizer consumption have a negative impact on LE in developed countries; however, they have a positive impact on LE in developing countries. Gini coefficient and average annual exposure to PM2.5 have no significant effect on LE in developed countries; however, they have a negative impact on LE in developing countries. Current healthcare expenditures per capita have a negative impact on LE in developed countries, and there is no significant impact on LE in developing countries. (2) The urbanization rate has a significant positive impact on LE in both developed countries and developing countries. Carbon dioxide emissions have a negative impact on LE in both developed and developing countries. (3) In developed countries, GDP per capita has the greatest positive impact on LE, while fertilizer consumption has the greatest negative impact on LE. In developing countries, the urbanization rate has the greatest positive impact on LE, while the Gini coefficient has the greatest negative impact on LE. To improve and prolong LE, it is suggested that countries should prioritize increasing GDP per capita and urbanization level. At the same time, countries should also work on reducing the Gini coefficient and formulating appropriate healthcare and education policies. On the other hand, countries should balance between economic development and environmental protection, putting the emphasis more on environmental protection, reducing environmental pollution, and improving the environment’s ability of self-purification.

Developing Economies in A Borderless World

2000 ◽  
Vol 35 (1) ◽  
pp. 47-62
Author(s):  
P.K. Jain ◽  
Manmohan Yadav
Keyword(s):  
South Asian ◽  
World Economy ◽  
Developing Economies ◽  
Economic Reforms ◽  
Trade Policies ◽  
Asian Countries ◽  
The South ◽  
Per Capita Gdp ◽  
The World ◽  
Per Capita

The “Death of Distance” will be the single most important economic force shaping the society over the next half century with geography, borders and time zones becoming irrelevant with the new communication revolution. The world trade has increased manifolds since World War II and the merchandise exports have increased to about $6,000 billion today from just $50 billion in 1950 while the trade in services is increasing faster and stands at about $1,450 billion as the economies are opening up and integrating with the world economy. As evident from the experience of the countries that followed open-market and free trade policies, achieved higher growth rates in their GDP, per capita GDP, and the exports than the closed economies. As more and more countries are opening their economies and integrating with the world economy and the revolution in IT, we are heading towards a “borderless” world with free flow of trade and resources. The autarkic strategies for economic development followed by India since its independence inevitably cut the economy off from the technological advancements in rest of the world and as a result India still remains way behind the industrialised economies. Also, despite above average growth in India's GDP and exports since 1970s than the world average, India's per capita GDP is among the lowest at $370. Even the most populous country in the world, China has per capita GDP of $860. The balance-of-payments crisis in mid-1991 forced the Indian policymakers to make a paradigm shift, though under IMF-led bail out package and prescription for structural adjustments, in its economic, industrial, and trade policies more commonly known as the “economic reforms”- liberalisation and globalisation of Indian economy. While the reforms have helped overcome the liquidity crisis and the economy broadly got back to the growth charted in 1980s, yet the structural adjustments have propelled investment in non-traded goods and in buying out of well performing Indian companies and brands by the MNCs than actually increasing the gross fixed capital formation in the manufacturing sector with the modern technologies. It is under this background and the similarities in cultural, political, ethnic and alike factors among the South Asian countries, that the present paper aims at analysing and learning lessons from the progressive aspects as well as failures of India's economic reforms, while the South Asian countries emulated the same.

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