The reality about aid and governance: the threshold theory

Jaouadi, Saïd (2011): The reality about aid and governance: the threshold theory.

Abstract

The aim of this survey is to explain the real impact of aid on governance in the developing countries: including the subsahara and the MENA region during the period 1990-2004 by using the “threshold theory”. Stephen Knack proved that foreign aid had a harmful impact on the governance of the developing countries. But, in this study we used a new econometric approach to test the existence of a threshold and to determine its value. This methodology allowed us to find interesting results in the relation between aid and governance, in the short and in the long run.

• Item Type: MPRA Paper
• Language: English
• Keywords: foreign aid, governance, threshold, institutions
• Subjects: F - International Economics > F3 - International Finance > F35 - Foreign Aid; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets ; Saving and Capital Investment ; Corporate Finance and Governance; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O19 - International Linkages to Development ; Role of International Organizations

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