Foreign Aid, Policy Effectiveness and Economic Growth in Tanzania

Chee-Keong Choong, Toy Jun Zheng and Lu Wu Tiong

The IUP Journal of Applied Economics, 2010, vol. IX, issue 2, 46-60

Abstract: : Doubts have always remained in the claim of foreign aid contributing towards the economic growth of the recipients. This paper, therefore, aims to study the effects of aid on the Tanzanian economic growth, the largest aid recipient in average, through Autoregressive Distributed Lag (ARDL) modeling. The relevancy of the presence of sound policies in affecting the effectiveness of aid is also studied and an index for policies is constructed. The results show that aid contributes positively towards the Tanzanian economic growth and sound policy would enhance the effectiveness of aid, although it is not a necessity.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjae:v:09:y:2010:i:2:p:46-60

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