On the Effect of Foreign Aid on Corruption
Economics Bulletin, 32(3), pp. 2174-2180. (2012)
9 Pages Posted: 10 Sep 2014 Last revised: 1 Apr 2015
Date Written: February 8, 2012
The Okada & Samreth (2012, EL) finding that aid deters corruption could have an important influence on policy and academic debates. This paper partially negates their criticism of the mainstream approach to the aid-development nexus. Using updated data (1996-2010) from 52 African countries we provide robust evidence of a positive aid-corruption nexus. Development assistance fuels (mitigates) corruption (the control of corruption) in the African continent. As a policy implication, the Okada & Samreth (2012, EL) finding for developing countries may not be relevant for Africa.
Keywords: Foreign Aid; Political Economy; Development; Africa
JEL Classification: B20; F35; F50; O10; O55
Suggested Citation: Suggested Citation