Foreign aid, recipient government's fiscal behavior, and economic growth

Ngoc-Sang Pham and Thi Kim Cuong Pham ()

Economics Bulletin, 2019, vol. 39, issue 4, 2457-2466

Abstract: The paper investigates the nexus between foreign aid, fiscal policy and economic outcomes in a small recipient country. Foreign aid may increase not only government expenditures but also private capital, and hence improve economic growth. However, it may also discourage the recipient's tax effort. The effects of foreign aid on fiscal policy and economic growth depend on the circumstances of the recipient country, including its development level, the TFP, the efficiency of public investment, and in particular the government's concern for the population's welfare.

Keywords: Foreign aid; fiscal behavior; public investment; public services; economic growth. (search for similar items in EconPapers)
JEL-codes: H2 O4 (search for similar items in EconPapers)
Date: 2019-11-03
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Foreign aid, recipient government's fiscal behavior, and economic growth (2019)
Working Paper: Foreign aid, recipient government’s fiscal behavior and economic growth (2019)
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