Open AccessImpact of Project and Programme Aid on Economic Growth: A Cross Country Analysis
Author(s) -
Pervez Zamurrad Janjua,
Malik Muhammad,
Muhammad Usman
Publication year - 2018
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v57i2pp.145-174
Subject(s) - conditionality , aid effectiveness , economics , estimation , investment (military) , procurement , developing country , moment (physics) , business , economic growth , politics , political science , physics , management , classical mechanics , law
This study examines the impact of foreign aid instruments,namely Project Aid and Programme Aid, on economic growth of 27aid-receiving countries. The study constructs a system of threeequations, i.e. growth, investment and human capital. Using theGeneralised Method of Moment estimation technique, the study concludesthat while Project Aid has a positive and significant impact on economicgrowth, Programme Aid has an insignificant impact on economic growth.Additionally, the study finds that economic policies do enhanceeffectiveness of aid at aggregate level. Therefore, the capacity ofaid-recipient countries to effectively use their resources for economicdevelopment needs due consideration. Keywords: Project Aid, ProgrammeAid, Economic Growth, Conditionality, Procurement Reform, SystemEquation Method, Generalised Method of Moment (GMM), Principal ComponentAnalysis