How Effective Is Japanese Foreign Aid? Econometric Results from a Bounded Rationality Model for Indonesia

Haider Khan ()

No CIRJE-F-164, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: How does Japanese aid influence the allocation of government expenditures and the raising of government revenues? Using a non-linear model with an asymmetric loss function the case of Japanese aid to Indonesia is examined at the macroeconomic level. It turns out that Japanese aid led to proportionately more development expenditures than other aid. It also might have been positively related to an increased effort by the Indonesian government to raise taxes. Economic explanations based on a bounded rationality models are advanced. Econometric and institutional explanations are also offered. The three sets of explanations can be seen as overlapping and complementary.

Pages: 27 pages
Date: 2002-08
New Economics Papers: this item is included in nep-cbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.cirje.e.u-tokyo.ac.jp/research/dp/2002/2002cf164.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2002cf164

Access Statistics for this paper

More papers in CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo Contact information at EDIRC.
Bibliographic data for series maintained by CIRJE administrative office ().