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Whether foreign aid promotes or hinders democratic institutions has been debated with opposing views. This paper investigates short- and long-run effects of foreign aid on democratization in post-conflict Cambodia using autoregressive distributed lag bounds testing and Gregory–Hansen structural break testing approach for cointegration over 1980–2015 period. The findings reveal that net bilateral foreign aid per capita, aggregated and classified into purpose-based ‘governance aid’, ‘economic aid’, ‘other aid’ and ‘donor-specific aid’ from the US, EU, France, Australia and Japan, promote long-run democratization. In the short run, only governance and economic aid appear to have a consistent positive effect on democratization.

In this paper, we focus on foreign aid-effectiveness in developing aid-recipient countries. By disaggregating total aid into sub-categories, we develop a model in which aid affects the welfare of the poor, as measured by a human development index. Our estimates (robust for different specifications) show that an increase in aid to the agricultural sector, one of our aid sub-categories, can improve the welfare of the poor, both directly and indirectly, through pro-poor public expenditure. Accordingly, more attention to the agricultural sector and reversing the decline in agricultural aid may improve the overall effectiveness of aid and achieve a sustainable transition out of poverty by increasing aggregate welfare.

This study examines the impact of foreign aid on the institutional quality (IQ) of the OIC countries. Using the data of OIC countries for the three-year average period from 1991 to 2016, the system GMM finds that aid in general deteriorates the IQ for the aid recipient countries. However, quantile regression suggests that the negative impact of foreign aid on institutional quality (IQ) is relatively greater in the countries where the existing quality of institution is poor. The findings of the study suggest that improving the existing capacity is essential for reaping the optimum benefit of foreign aid on institutional development.

This paper investigates the link between foreign aid and exports between the two shores of the Mediterranean. The main hypothesis is that the Euro-Mediterranean Process should promote not only trade but also stronger links between the European Union (EU) and the Middle East and North Africa (MENA). Hence, we expect development aid to have a positive impact on exports, which could also intensify the aid-trade relationship. In particular, we expect to find higher trade volumes in both directions after the process started in 1995 and intensified in the late 1990s and early 2000s, when several bilateral free trade agreements were signed. A gravity model augmented with bilateral and multilateral aid and trade regime variables is estimated for exports and imports from recipient countries to donor countries for the period 1988 to 2007 using advanced panel data techniques. Our method addresses the endogeneity bias of the trade regime/economic integration agreement (EIA) variable, assuming that decisions to form or enlarge EIAs are slow-moving relative to trade flows.

The article starts from the Multidimensional Poverty Index (MPI) methodology and measures (Santos et al. 2015) available, and uses them to compare the current disbursements of Official Development Aid (ODA) with MPI-related deprivations and indicators. In particular, the six deprivation dimensions are matched with the current sectorial classifications contained in the OECD-CRS database. This empirical exercise allows making a comparison between ODA donors’ current disbursements (priorities) and normative disbursements, if the MPI were taken as the rule in order to attain the objective of real poverty eradication. Important political consequences of this counterfactual exercise are deduced: Latin American development agencies (ministries or departments) should start to register ODA flows using the multidimensional poverty dimensions (housing, basic services, standard of living, education, and employment, and social protection); donors (both North-South and South-South Cooperation) should focus their resources and priorities on the MPI structure, increasing recipients’ ownership of development strategies and interventions. This information and way of delivery may make it possible to focus the evaluation of ODA flows more deeply on their impact on poverty, in line with Busan’s recommendations and the post-2015 development agenda (SDG 1).

The choice of targets for terrorist attacks is often considered to be random or illogical. In other cases targets are seen as being chosen for their symbolic importance to the audience the terrorists are seeking to reach or to indicate that no area of the country is safe. Terrorist groups, however, also choose their targets because of the economic impact that the attacks will have. There are patterns in economic attacks since different groups choose different kinds of targets. There may be increases in economic targeting, especially in the tourism sector where attacks create economic hardship and to reduce revenues for the governments. Foreign investment projects have also become frequent targets because of their economic potential for increasing government capacities. Trade activities and foreign aid projects have also become targets. In an increasingly global economy, such attacks have an even greater potential for destabilization effects.

This study examines the effectiveness of foreign aid, foreign direct investment, and economic freedom for selected 28 Asian countries in a panel framework. The model includes foreign aid, foreign direct investment, economic freedom, labor force, and capital stock. The estimation procedure was carried out on pooled annual time series data for the period 1998-2007. For the purpose of analysis, we used static and dynamic panel data techniques. The results indicated that an increase in the fiscal freedom, financial freedom and domestic capital stock were significant factors positively affecting economic growth. Freedom from corruption, inflow of foreign direct investment and foreign aid were significant factors negatively affecting economic growth. Further, we found that life expectancy played a significant and positive role in economic growth. Foreign aid had a non-linear impact (negative impact of high aid flows) upon economic growth.