Aid, governance and private foreign investment: Some puzzling findings for the 1990s

• 成果类型: Article
• 署名作者: Harms, Philipp; Lutz, Matthias
• 署名单位: RWTH Aachen University; University of St Gallen
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2006.01111.x
• 发表日期: 2006
• 页码: 773-790
• 关键词: policies

摘要

Does official aid pave the road for private foreign investment or does it suffocate private initiative by diverting resources towards unproductive activities? We explore this question using panel data covering a large number of developing and emerging economies during the 1990s. Controlling for countries' institutional environment, we find that, evaluated at the mean, the marginal effect of aid on private foreign investment is close to zero. Surprisingly, however, the effect is strictly positive for countries in which private agents face a substantial regulatory burden. This result is robust across a wide range of specifications, samples and estimation methods.