Does Foreign Aid Corrupt?
16 Pages Posted: 27 Sep 2001
Date Written: September 2001
We estimate the impact of foreign aid on corruption using geographical and cultural distance to the donor countries as instrumental variables to assess causality. Aid decreases corruption. Our results are statistically and economically significant and robust to different controls.
Keywords: International Aid, Corruption, Instrumental Variables
JEL Classification: F35, E62, H10
Suggested Citation: Suggested Citation