Forced to Freedom? Empirical relations between aid and economic freedom

Franz Kronthaler and Tobias Knedlik

No 19, Proceedings of the German Development Economics Conference, Göttingen 2007 from Verein für Socialpolitik, Research Committee Development Economics

Abstract: The paper explores the relationships between economic freedom on the one side and development aid and IMF credit as approximation for conditional aid on the other side. After a short review of current literature the paper develops a simple panel regression model to evaluate the relationships. In contrast to previous research, our results allow the rejection of the hypothesis that IMF credit increases economic freedom and that development aid is not contributing to economic freedom. It could not be shown that countries can be forced to economic freedom by aid conditions. The paper discusses explanations of the empirical findings.

Keywords: Aid receiving countries; economic freedom; development aid; IMF credit (search for similar items in EconPapers)
JEL-codes: F35 O19 P10 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-afr and nep-dev
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https://www.econstor.eu/bitstream/10419/19875/1/Kronthaler.pdf (application/pdf)

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Working Paper: Forced to Freedom? Empirical Relations between Aid and Economic Freedom (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:gdec07:6542

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