 Foreign Aid to Bangladesh: Some Iconoclastic IssuesKhandokar Mohammad Istiak ()
Journal of Developing Areas, 2012, vol. 46, issue 1, 331-343 Abstract: The famous 'Two Gap' economic theory suggests that an injection of foreign aid raises investment and savings of a country. However, a number of empirical studies have found that foreign aid has actually supplanted savings in many countries. The paper investigates the relationship between aid and gross domestic savings in Bangladesh and finds that these two variables are independent and have no effects on each other, which are different findings compared to other studies. Moreover, this paper concentrates on the capacity of Bangladesh economy to bear the obligation of foreign aid. Unlike some other papers, this one finds out that although the interest payment and total debt service charge of the loan are increasing, it is not a mishap because export earnings and income of economy of Bangladesh are increasing sufficiently enough to bear the burden. So, against the conventional characteristics of foreign aid to Bangladesh, this paper introduces some new issues about it. Keywords: Aid; Savings; Granger Causality; Stationary; Debt service (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.46:year:2012:issue1:pp:331-343 Access Statistics for this article More articles in Journal of Developing Areas from Tennessee State University, College of Business Contact information at EDIRC. |
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