The Effectiveness of Aid in Improving Regulations – Empirical Evidence and the Drivers of Change in Rwanda
Ruhr-University Bochum; HWWI - Hamburg Institute of International Economics
Ruhr Universität Bochum - Faculty of Economics
University of Ghana - Institute of Statistical, Social and Economic Research (ISSER)
March 18, 2013
The paper assesses the impact of foreign aid on the change in the quality of regulations, and identifies the drivers of this change in a case study on Rwanda. In the empirical analysis, we find that highly targeted Aid for Business has a significantly positive impact on regulations across developing countries, but we do not find any effects for overall aid or aid directed at broad governance areas. In the country case study, we depart from Rwanda’s excellent regulatory performance to explain how aid is effective in changing the regulatory environment, driven by the country’s strong political leadership and its singular institutional history.
Number of Pages in PDF File: 33working papers series
Date posted: March 20, 2013
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