Sorting out the Aid-Corruption Nexus

Journal of Institutional Economics (forthcoming)

36 Pages Posted: 4 Jan 2021 Last revised: 12 Jul 2021

See all articles by Jamie Bologna Pavlik

Jamie Bologna Pavlik

Texas Tech University - Department of Agricultural and Applied Economics

Andrew T. Young

Texas Tech University - Rawls College of Business

Date Written: July 2021

Abstract

We employ matching methods to explore the relationships between foreign aid flows and corruption in recipient countries. Data are drawn from recipients of foreign aid for the 1996 to 2013 period. We find no compelling evidence of an effect running from corruption to aid flows. Furthermore, point estimates imply that corruption reforms lead countries to receive less aid. Alternatively, we generally find that, over a 10-year horizon, a sustained increase in aid leads to more corruption in a recipient. It is the sustained nature of an aid increase that seems to be important for this effect. (We generally do not report significant results for large changes in aid that are not sustained over time.)

Keywords: foreign aid, official development assistance, ODA, corruption, institutional quality, economic development, matching methods

JEL Classification: F35, D73, O1, O19

Suggested Citation

Bologna Pavlik, Jamie and Young, Andrew T., Sorting out the Aid-Corruption Nexus (July 2021). Journal of Institutional Economics (forthcoming), Available at SSRN: https://ssrn.com/abstract=3721692 or http://dx.doi.org/10.2139/ssrn.3721692

Jamie Bologna Pavlik

Texas Tech University - Department of Agricultural and Applied Economics ( email )

Suite 167, 2625 Memorial Circle
TTU Administration
Lubbock, TX 79409
United States

Andrew T. Young (Contact Author)

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
65
Abstract Views
567
rank
465,215
PlumX Metrics