Aid, Growth, and Devolution: Considering Aid Modality and Different Types of Decentralization
In this paper, we provide further evidence on the relationship between decentralization and foreign aid effectiveness. Our previous work has shown that decentralization decreases aid effectiveness, i.e., the impact of aid on economic growth is negative in decentralized countries. However, our previo...
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| Veröffentlicht in: | World development 2016-08, Vol.84, p.118-130 |
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| creator | Lessmann, Christian Markwardt, Gunther |
| description | In this paper, we provide further evidence on the relationship between decentralization and foreign aid effectiveness. Our previous work has shown that decentralization decreases aid effectiveness, i.e., the impact of aid on economic growth is negative in decentralized countries. However, our previous work has not taken different types of aid and different types of decentralization into account, which is at the heart of our current analysis. We consider different measures of decentralization, in particular measures of fiscal decentralization derived from government finance statistics and measures of political decentralization that are constructed based on countries’ constitutional rules. In addition, we take different types of aid into account: grants, loans, technical assistance, total net ODA; and we distinguish between multi-lateral and bi-lateral aid in order to consider differences in the donor structure. Our empirical analysis is based on panel data of up to 53 developing countries. In our growth regressions, we combine all types of decentralization with the different types of aid. We find important differences between different types of decentralization: (i) fiscal decentralization negatively affects aid effectiveness (in line with our previous work), (ii) employment decentralization may increase aid effectiveness, and (iii) political decentralization does not hamper aid effectiveness or may even have positive effects. |
| doi_str_mv | 10.1016/j.worlddev.2016.03.018 |
| format | Article |
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Our previous work has shown that decentralization decreases aid effectiveness, i.e., the impact of aid on economic growth is negative in decentralized countries. However, our previous work has not taken different types of aid and different types of decentralization into account, which is at the heart of our current analysis. We consider different measures of decentralization, in particular measures of fiscal decentralization derived from government finance statistics and measures of political decentralization that are constructed based on countries’ constitutional rules. In addition, we take different types of aid into account: grants, loans, technical assistance, total net ODA; and we distinguish between multi-lateral and bi-lateral aid in order to consider differences in the donor structure. Our empirical analysis is based on panel data of up to 53 developing countries. In our growth regressions, we combine all types of decentralization with the different types of aid. We find important differences between different types of decentralization: (i) fiscal decentralization negatively affects aid effectiveness (in line with our previous work), (ii) employment decentralization may increase aid effectiveness, and (iii) political decentralization does not hamper aid effectiveness or may even have positive effects.</description><identifier>ISSN: 0305-750X</identifier><identifier>EISSN: 1873-5991</identifier><identifier>DOI: 10.1016/j.worlddev.2016.03.018</identifier><identifier>CODEN: WODEDW</identifier><language>eng</language><publisher>Oxford: Elsevier Ltd</publisher><subject>Decentralization ; Developing countries ; Devolution ; Economic conditions ; Economic development ; Economic growth ; Effectiveness ; Effectiveness studies ; Empirical analysis ; Employment ; Fiscal policy ; Foreign aid ; Government finance ; Grants ; growth ; Growth models ; Impact analysis ; LDCs ; Loans ; Panel data ; Politics ; Public finance ; Regression analysis ; Statistical analysis ; Statistics ; Technical assistance ; Work</subject><ispartof>World development, 2016-08, Vol.84, p.118-130</ispartof><rights>2016 Elsevier Ltd</rights><rights>Copyright Pergamon Press Inc. 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Our previous work has shown that decentralization decreases aid effectiveness, i.e., the impact of aid on economic growth is negative in decentralized countries. However, our previous work has not taken different types of aid and different types of decentralization into account, which is at the heart of our current analysis. We consider different measures of decentralization, in particular measures of fiscal decentralization derived from government finance statistics and measures of political decentralization that are constructed based on countries’ constitutional rules. In addition, we take different types of aid into account: grants, loans, technical assistance, total net ODA; and we distinguish between multi-lateral and bi-lateral aid in order to consider differences in the donor structure. Our empirical analysis is based on panel data of up to 53 developing countries. In our growth regressions, we combine all types of decentralization with the different types of aid. We find important differences between different types of decentralization: (i) fiscal decentralization negatively affects aid effectiveness (in line with our previous work), (ii) employment decentralization may increase aid effectiveness, and (iii) political decentralization does not hamper aid effectiveness or may even have positive effects.</description><subject>Decentralization</subject><subject>Developing countries</subject><subject>Devolution</subject><subject>Economic conditions</subject><subject>Economic development</subject><subject>Economic growth</subject><subject>Effectiveness</subject><subject>Effectiveness studies</subject><subject>Empirical analysis</subject><subject>Employment</subject><subject>Fiscal policy</subject><subject>Foreign aid</subject><subject>Government finance</subject><subject>Grants</subject><subject>growth</subject><subject>Growth models</subject><subject>Impact analysis</subject><subject>LDCs</subject><subject>Loans</subject><subject>Panel data</subject><subject>Politics</subject><subject>Public finance</subject><subject>Regression analysis</subject><subject>Statistical analysis</subject><subject>Statistics</subject><subject>Technical assistance</subject><subject>Work</subject><issn>0305-750X</issn><issn>1873-5991</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2016</creationdate><recordtype>article</recordtype><sourceid>7TQ</sourceid><recordid>eNqFkMFKAzEQhoMoWKuvIAtePLjrpNk0G09K1SooXhS8SNhNJpqybmqyrdSnN6V68eJpGPj-n5mPkEMKBQU6Pp0Vnz60xuCyGKW9AFYArbbIgFaC5VxKuk0GwIDngsPzLtmLcQYAnEkxIC8Xzpxk0-A_-7eTrO5MdolL3y5657uzbOK76AwG171mCczuvalb1682oLMWA3Z99riaY8y8TVmd9pCYr3rdsE92bN1GPPiZQ_J0ffU4ucnvHqa3k4u7XJdM9Lk0I64by6WgUjSGNRqhbBhjXNgGuIVKAC0lUikbC4yzko6Ql7oaYT1GIdiQHG9658F_LDD26t1FjW1bd-gXUVEhQaYOVib06A8684vQpevWFGW84knNkIw3lA4-xoBWzYN7r8NKUVBr62qmfq2rtXUFTCXrKXi-CWJ6d-kwqKgddhqNC6h7Zbz7r-IbWHiNvw</recordid><startdate>20160801</startdate><enddate>20160801</enddate><creator>Lessmann, Christian</creator><creator>Markwardt, Gunther</creator><general>Elsevier Ltd</general><general>Pergamon Press Inc</general><scope>AAYXX</scope><scope>CITATION</scope><scope>7ST</scope><scope>7TQ</scope><scope>7U6</scope><scope>8BJ</scope><scope>C1K</scope><scope>DHY</scope><scope>DON</scope><scope>FQK</scope><scope>JBE</scope><scope>SOI</scope></search><sort><creationdate>20160801</creationdate><title>Aid, Growth, and Devolution: Considering Aid Modality and Different Types of Decentralization</title><author>Lessmann, Christian ; Markwardt, Gunther</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c437t-9d25cbf597197bd3bce04b33357fb05f0870149e199bf0353412e54c82ea6e773</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2016</creationdate><topic>Decentralization</topic><topic>Developing countries</topic><topic>Devolution</topic><topic>Economic conditions</topic><topic>Economic development</topic><topic>Economic growth</topic><topic>Effectiveness</topic><topic>Effectiveness studies</topic><topic>Empirical analysis</topic><topic>Employment</topic><topic>Fiscal policy</topic><topic>Foreign aid</topic><topic>Government finance</topic><topic>Grants</topic><topic>growth</topic><topic>Growth models</topic><topic>Impact analysis</topic><topic>LDCs</topic><topic>Loans</topic><topic>Panel data</topic><topic>Politics</topic><topic>Public finance</topic><topic>Regression analysis</topic><topic>Statistical analysis</topic><topic>Statistics</topic><topic>Technical assistance</topic><topic>Work</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Lessmann, Christian</creatorcontrib><creatorcontrib>Markwardt, Gunther</creatorcontrib><collection>CrossRef</collection><collection>Environment Abstracts</collection><collection>PAIS Index</collection><collection>Sustainability Science Abstracts</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>Environmental Sciences and Pollution Management</collection><collection>PAIS International</collection><collection>PAIS International (Ovid)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><collection>Environment Abstracts</collection><jtitle>World development</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Lessmann, Christian</au><au>Markwardt, Gunther</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Aid, Growth, and Devolution: Considering Aid Modality and Different Types of Decentralization</atitle><jtitle>World development</jtitle><date>2016-08-01</date><risdate>2016</risdate><volume>84</volume><spage>118</spage><epage>130</epage><pages>118-130</pages><issn>0305-750X</issn><eissn>1873-5991</eissn><coden>WODEDW</coden><abstract>In this paper, we provide further evidence on the relationship between decentralization and foreign aid effectiveness. Our previous work has shown that decentralization decreases aid effectiveness, i.e., the impact of aid on economic growth is negative in decentralized countries. However, our previous work has not taken different types of aid and different types of decentralization into account, which is at the heart of our current analysis. We consider different measures of decentralization, in particular measures of fiscal decentralization derived from government finance statistics and measures of political decentralization that are constructed based on countries’ constitutional rules. In addition, we take different types of aid into account: grants, loans, technical assistance, total net ODA; and we distinguish between multi-lateral and bi-lateral aid in order to consider differences in the donor structure. Our empirical analysis is based on panel data of up to 53 developing countries. In our growth regressions, we combine all types of decentralization with the different types of aid. We find important differences between different types of decentralization: (i) fiscal decentralization negatively affects aid effectiveness (in line with our previous work), (ii) employment decentralization may increase aid effectiveness, and (iii) political decentralization does not hamper aid effectiveness or may even have positive effects.</abstract><cop>Oxford</cop><pub>Elsevier Ltd</pub><doi>10.1016/j.worlddev.2016.03.018</doi><tpages>13</tpages></addata></record> |
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| subjects | Decentralization Developing countries Devolution Economic conditions Economic development Economic growth Effectiveness Effectiveness studies Empirical analysis Employment Fiscal policy Foreign aid Government finance Grants growth Growth models Impact analysis LDCs Loans Panel data Politics Public finance Regression analysis Statistical analysis Statistics Technical assistance Work |
| title | Aid, Growth, and Devolution: Considering Aid Modality and Different Types of Decentralization |
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