Effects of foreign aid on the recipient country’s economic growth - HAL-SHS - Sciences de l'Homme et de la Société Accéder directement au contenu
Article Dans Une Revue Journal of Mathematical Economics Année : 2020

Effects of foreign aid on the recipient country’s economic growth

Résumé

We introduce an infinite-horizon endogenous growth framework for studying the effects of foreign aid on the economic growth in a recipient country. Aid is used to partially finance the recipient’s public investment. We point out that the same rule of aid may have very different outcomes, depending on the recipient’s circumstances in terms of development level, domestic investment, efficiency in the use of aid and in public investment, etc. Foreign aid may promote growth in the recipient country, but the global dynamics of equilibrium are complex (because of the non-monotonicity and steady state multiplicity). The economy may converge to a steady state or grow without bounds. Moreover, there are rooms for the divergence and a two-period cycle. We characterize conditions under which each scenario takes place. Our analysis contributes to the debate on the nexus between aid and economic growth and in particular on the conditionality of aid effects.
Fichier principal
Vignette du fichier
MPRA_paper_93379 (1).pdf (517.2 Ko) Télécharger le fichier

Dates et versions

hal-02434995 , version 1 (24-02-2023)

Identifiants

Citer

Ngoc-Sang Pham, Thi Kim Cuong Pham. Effects of foreign aid on the recipient country’s economic growth. Journal of Mathematical Economics, 2020, 86, pp.52-68. ⟨10.1016/j.jmateco.2019.11.004⟩. ⟨hal-02434995⟩
159 Consultations
47 Téléchargements

Altmetric

Partager

Gmail Facebook X LinkedIn More