Aid and growth: A study of South East Asia

Paul J. Burke; Fredoun Z. Ahmadi-Esfahani

doi:10.1016/j.asieco.2006.02.006

Aid and growth: A study of South East Asia

Paul J. Burke, Fredoun Z. Ahmadi-Esfahani^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

31 Citations (Scopus)

Abstract

The success of foreign aid in promoting economic growth in developing nations is an issue of considerable controversy. In this article, the effectiveness of aid in promoting growth in three South East Asian countries - Thailand, Indonesia and the Philippines - is empirically tested, using a simultaneous-equation model in which growth and savings are jointly determined. The results indicate that aid had an insignificant effect on the growth rates of the three nations during 1970-2000 and did not displace domestic savings. The findings appear valid for both before and during the Asian financial crisis and underline the importance of exports and foreign direct investment in the South East Asian growth experience.

Original language	English
Pages (from-to)	350-362
Number of pages	13
Journal	Journal of Asian Economics
Volume	17
Issue number	2
DOIs	https://doi.org/10.1016/j.asieco.2006.02.006
Publication status	Published - Apr 2006
Externally published	Yes

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10.1016/j.asieco.2006.02.006

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title = "Aid and growth: A study of South East Asia",

abstract = "The success of foreign aid in promoting economic growth in developing nations is an issue of considerable controversy. In this article, the effectiveness of aid in promoting growth in three South East Asian countries - Thailand, Indonesia and the Philippines - is empirically tested, using a simultaneous-equation model in which growth and savings are jointly determined. The results indicate that aid had an insignificant effect on the growth rates of the three nations during 1970-2000 and did not displace domestic savings. The findings appear valid for both before and during the Asian financial crisis and underline the importance of exports and foreign direct investment in the South East Asian growth experience.",

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AU - Ahmadi-Esfahani, Fredoun Z.

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AB - The success of foreign aid in promoting economic growth in developing nations is an issue of considerable controversy. In this article, the effectiveness of aid in promoting growth in three South East Asian countries - Thailand, Indonesia and the Philippines - is empirically tested, using a simultaneous-equation model in which growth and savings are jointly determined. The results indicate that aid had an insignificant effect on the growth rates of the three nations during 1970-2000 and did not displace domestic savings. The findings appear valid for both before and during the Asian financial crisis and underline the importance of exports and foreign direct investment in the South East Asian growth experience.

KW - Aid effectiveness

KW - Economic growth

KW - Foreign aid

KW - South East Asia

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SP - 350

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JO - Journal of Asian Economics

JF - Journal of Asian Economics

IS - 2

ER -

Aid and growth: A study of South East Asia

Abstract

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