Does aid unpredictability weaken governance? Evidence from developing countries - HAL-SHS - Sciences de l'Homme et de la Société
Journal Articles The Developing Economies Year : 2013

Does aid unpredictability weaken governance? Evidence from developing countries

Abstract

This paper examines the effects of aid on governance from a different perspective by asserting that aid unpredictability can potentially increase corruption in recipient countries by providing incentives to risk-averse and corrupt political leaders to engage in rent-seeking activities. Analyses of data from 80 developing countries over the period 1984-2004 offer evidence that higher aid unpredictability is associated with more corruption as measured by a synthetic index. We also find further evidence that this latter impact is more severe in countries with weak initial institutional conditions. These findings are a supplementary advocacy for the need for better management and better predictability of aid flow in developing countries.

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Dates and versions

halshs-00843756 , version 1 (12-07-2013)

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  • HAL Id : halshs-00843756 , version 1

Cite

Thierry Kangoye. Does aid unpredictability weaken governance? Evidence from developing countries. The Developing Economies, 2013, 51 (2), pp.121-144. ⟨halshs-00843756⟩
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