National culture and the distribution of foreign aid

This paper investigates the relationship between a country’s national culture and the level of aid it grants to other countries. We rely on Hofstede’s culture framework to quantify national culture and find that national culture and aid are significantly related. Specifically, we show that countries having high power distance, high masculinity and high uncertainty avoidance cultures appear to refrain from engaging in foreign assistance programmes. On the other hand, high individualistic-culture countries tend to provide greater levels of foreign aid. Overall, the results imply that national culture matters in shaping the donation behaviour of aid providers.

IMPACT OF OFFICIAL DEVELOPMENT ASSISTANCE ON SUSTAINABLE DEVELOPMENT OF PAKISTAN

This research paper aims to find out the relationship between Official Development Assistance and sustainable development in Pakistan. Time series data was taken for the period of 42 years (1976 -2017). Sustainable Development is a dependent variable for which proxy variable of Adjusted Net Savings has been deployed. ODA (% of GNI), Inflation, Per Capita GDP and Trade (GDP %) have been used as explanatory variables. Augmented Dickey-Fuller Test has been applied to examine the nature of the data as time series data may contain unit root problems. ADF test confirms mixed order of integration for the selected variables, hence Autoregressive Distributed Lag (ARDL) Approach was applied to find out the long-run relationship among the considered variables. Estimation of Error Correction Regression resulted in a significant long-run relationship between ODA and Sustainable Development. ECM Regression also signifies the negative and significant value of the speed of adjustment term confirming that the model is stable and convergent towards the equilibrium. Overall results of this study confirm a positive and highly significant relationship between ODA and the measure of sustainable development in Pakistan. Therefore it is recommended that attention should be given to drawing on foreign assistance and it should be subject to the transparent and efficient practices applied in the Aid Allocation. It significantly improves the overall welfare of Pakistan.

Ayuda, hegemonía y poder: EEUU y la configuración de la agenda global del desarrollo

Esta contribución examina el papel de EEUU como actor determinante en la definición del desarrollo, las políticas de ayuda externa y el sistema internacional de cooperación al desarrollo tras la II Guerra Mundial. Para ello, analiza los principales hitos históricos que ayudan a entender esa conexión, desde sus orígenes hasta el 11–S y la Agenda 2030 para el Desarrollo Sostenible, como el Plan Marshall, la Foreign Assistance Act, la “Alianza para el Progreso” o la creación del Comité de Ayuda al Desarrollo de la OCDE en 1960. Con esos hitos de la agenda del desarrollo internacional, Estados Unidos ha dado forma a distintas formas de orden internacional hegemónico, desde una configuración bipolar a una globalización en ascenso y posteriormente en crisis. Esta ha dado paso a nuevos actores y dinámicas que finalmente están poniendo en cuestión su centralidad como actor de ese sistema. Es el caso de la cooperación Sur–Sur de los países emergentes, que demanda una agenda y una arquitectura del desarrollo más amplia e inclusiva a través de los Objetivos de Desarrollo Sostenible.

Empirical Analysis of the Macroeconomic impact of Foreign Aid on Pakistan Economy (1972-2014)

Purpose: Although Pakistan receives large quantity of foreign aid, like other developing countries, but it remains more dependent on foreign assistance for economic development since independence. This situation has commenced a vigorous discussion on aid-growth effectiveness. Methodology: This research work evaluates the macroeconomic impact of foreign aid on Pakistan economy by using secondary data. The empirical analysis is based on ARDL cointegration approach after testing for unit root, using the data for the period 1972-2014. Findings: The findings suggest there is no long run relationship between Foreign aid and Economic Growth. However, there exists negative short run relation between Foreign aid and Economic Growth of Pakistan. Implications: Based on the study findings, the study recommends that government of Pakistan should find alternate sources of financing as the relation between foreign aid and economic growth is found negative and insignificant. The in depth analysis of the study made it evident that allocation of aid to those sectors of the economy which really needs development, is more productive, provided that the country should use aid funds in the right direction, as corruption less economy prosper more rapidly.

Trilateral Cooperation: China’s and the EU’s Foreign Assistance in Africa

Over the years, China has forged and mastered its own distinctive foreign aid practices as an emerging aid donor. China’s approach to foreign assistance has become highly appreciated as the country’s stature as a provider of economic assistance has matured. In 2013, under President Xi Jinping, Beijing introduced the Belt and Road Initiative, which has become a leading component of China’s foreign policy and triggered a new round of policy reform in its foreign aid agenda. In Africa, China’s foreign assistance has kept in line with the policy of equal treatment. It has shared its development experience, helped many African countries to transition from “poor” to “developing”, from “aid recipients” to “wealth creators,” and many African countries are thus turning their interests from the West to the East. Certainly, the European Union as a traditional aid donor, remains the largest aid distributor in the world, especially in Africa. In other words, the EU’s foreign assistance has become an indispensable source of funding for many African countries. However, foreign aid effectiveness remains low on the African continent because of the absence of native African policymakers in aid programs designed and implemented by Beijing and Brussels. Some critics argue that Chinese and European assistance to Africa is not bringing about the best results as expected. This article argues that a new international architecture of foreign assistance through trilateral cooperation is needed to increase Chinese and European aid effectiveness in Africa. Trilateral cooperation will not only increase foreign assistance efficiency in Africa, but also give a chance to African countries to strengthen their own development capacity through assistance and guidance, reduce Africa’s aid dependence, and hopefully guarantee a smooth “graduation” of African countries from official development assistance.

Evolution of the U.S. Assistance Program and the Soviet “Economic Offensive” Factor (1950s)

Introduction. This article is devoted to studying the influence of the Soviet “economic offensive” factor in the 1950s on the formation of the New World Economic Order by the American by the American ruling elite in general and the use of such an important tool as foreign assistance in particular in the framework of this process. The reconstruction of this process makes it possible to clarify the specifics of the foreign policy decision-making mechanism in the United States, to identify the ideological approaches of main political interest groups to the goals and methods of building a new world order. Methods and materials. The study uses a group analysis approach as well as American executive and legislative documents, press material, speeches by key politicians, etc., to identify the reasons for the differences among representatives of the three leading interest groups in interpreting the nature of the Soviet “economic offensive” in the Third World countries. Analysis. These differences were primarily due to the possibility of using the factor of the Soviet “aggression” for conducting domestic propaganda campaigns as part of the interest groups struggle for control over the foreign assistance program. Thus, the representatives of the atlantists group claimed that the main threat from the Communist world remained in the military sphere; the globalist-oriented progressives insisted that the Soviet “economic offensive” was a critical danger to U.S. interests, while conservatives declared that the “myths” about the Soviet-communist threats to the United States in the Third World were invalid. Results. In the second half of the 1950s the group of progressives used the factor of the Soviet “economic offensive” more effectively in the framework of their campaigns (there were four of them), which allowed them to take control over the foreign assistance program and begin to reorient the American strategic course from the prevailing ideology of “mutual security” towards the global developmentalism.

The Impact of Fiscal Policy on Economic Growth in Palestine

This study aims at finding the impact of fiscal policy with its various instruments such as, current expenditures, capital expenditures, Tax revenues, non-Tax revenues, foreign assistance and value added tax revenues on economic growth in Palestine represented by the rate of growth of real GDP during the period 1996-2018. A Multiple Regression Analysis was used to build the model and test the hypothesis. The estimated results showed four of the six independent variables have a significant effect on economic growth, with current and development expenditure having a positive effect while tax and non-tax revenue having a negative effect. On the other hand, foreign aid and clearing tax by Israeli authorizations have no significant effect on economic growth, (though, the last one is significant at 10%). The study has also found that government expenditures need to be redistributed between current and development expenditures so as to increase the share of development expenditures in order to maintain a high growth rate. The paper recommends that the tax rate should be reduced on productive projects which are designed to decrease the unemployment rate and increase the rate of growth. The study has also pointed out to the significance of re-negotiating the Paris accord with the Israeli authorities so as to improve the terms of this accord, especially in the case of collecting the VAT revenues.

China’s Engagements in Africa: Is China a “Partner” or a “Predator”?

From modest beginnings in 1960, China has expanded its foreign assistance and investments in Africa and has recently become a highly visible actor in Africa’s lending landscape. With China’s financial support, African countries are transitioning from “poor countries” to “developing countries”, and China’s investments in Africa have made the continent more attractive to other external investors. However, China’s engagements in Africa are labeled in extreme connotations as either being the best economic “Partner” that Africa has had since the post-colonial era or just the latest “Predator” coming to pillage Africa’s remaining natural resources. Why such connotations? Why do media around the world, especially Western media, criticize China’s engagements in Africa? Is it because China has threatened Western countries’ interests in Africa or is it about the overhyped debate about African countries’ high “external debt” problem? Using mixed qualitative and quantitative methods, this paper examines those critics who argue that recognizing China’s engagements in Africa is the first step toward understanding China’s “peaceful rise” and hopefully stymie further false accusations.