Determinants of Foreign Aid with the Use of IMF Compliance Conditionality Index: Case Study of Pakistan (1973-2006)
University of London
December 15, 2009
In this paper author tried to analyse the determinants of foreign aid to Pakistan from the perspective of bilateral and multilateral donors. In this paper author found that the flow of foreign aid to Pakistan is due to the economic, political, and strategic interests of donors especially bilateral donors and also due to the economic and better policy management in prescribed areas. In this paper author incorporated the IMF Compliance Conditionality Index, which was not done before in this context. IMF Compliance Conditionality index, democracy, imports from US, UK and Japan are major determinants of foreign aid to Pakistan. GDP growth rate and literacy rate are not significant variables in this paper. Geo-politics is one of the important variables in the foreign aid flows to Pakistan. Components of IMF compliance conditionality index are not significant individually but as an index they are significant.
Number of Pages in PDF File: 44
Keywords: Foreign Aid, Political Concerns, IMF Compliance Conditionality Index, Tobit, Financial Liberalization
JEL Classification: C20, C43, F35working papers series
Date posted: December 16, 2010
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