Long Run Effects of Foreign Aid on Economic Growth

Authors

  • Nicholas Larsen Eastern Washington University

DOI:

https://doi.org/10.33423/jabe.v22i13.3910

Keywords:

business, economics, economic growth, foreign aid, long run effects

Abstract

This paper finds evidence of long run effects on a country’s per capita Gross Domestic Product (GDP) growth using a panel data set of 57 countries that received Official Development Aid (ODA) between 1970 and 2017. The results suggest a statistically significant “multiplier effect” that is sizable. Looking at foreign aid per capita the results suggests that policy makers can achieve a permanent 1% increase in per capita GDP growth by increasing per capita ODA by approximately $110. Similar results are found when using an alternative measure—ODA per Gross National Income—of foreign aid.

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Published

2020-12-20

How to Cite

Larsen, N. (2020). Long Run Effects of Foreign Aid on Economic Growth. Journal of Applied Business and Economics, 22(13). https://doi.org/10.33423/jabe.v22i13.3910

Issue

Section

Articles