CORRUPTION AND INTERNATIONAL AID ALLOCATION: A COMPLEX DANCE

Lauren E. Lopez ()
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Lauren E. Lopez: The Ohio State University, USA

Journal of Economic Development, 2015, vol. 40, issue 1, 35-61

Abstract: This paper studies the relationship between donor governments' Official Development Assistance (ODA) decisions and corruption in recipient countries over the period 1999-2010. Previous studies found that donors do not penalize recipients on the basis of corruption. Using a rich panel data set, this paper estimates the effect of corruption on aid using donor-recipient fixed effects and disaggregating aid into sectors which may vary in sensitivity to corruption. Overall, there is a moderately significant, negative effect of corruption on aid. This relationship varies across sectors - corrupt recipients receive more humanitarian assistance and less production sector and social infrastructure aid.

Keywords: Official Development Assistance; Bilateral Aid Allocation; Corruption (search for similar items in EconPapers)
JEL-codes: F35 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:40:y:2015:i:1:p:35-61

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