Governance and foreign aid in Pacific Island countries

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Abstract

This paper examines the relationship between indicators of governance and per capita foreign aid in a cross-section of seven PICs. Controlling for poor economic growth, foreign exchange shortage and small size, a fixed-effects model correcting for AR (1) errors is tested for the period 1996-2004 that incorporates five measures of governance. The findings here confirm that voice and accountability, rule of law and corruption are negatively correlated with per capita foreign aid. However, regulatory quality and government effectiveness are positively associated with per capita foreign aid. Some policy implications are drawn.

Original languageEnglish
Pages (from-to)112-125
Number of pages14
JournalJournal of International Development
Volume21
Issue number1
DOIs
Publication statusPublished - 2009

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Keywords

  • Aid
  • Asia Pacific
  • Corruption
  • Empirical
  • Governance
  • Pacific Islands

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

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