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The effect of foreign aid on income inequality: Evidence from panel cointegration

Dierk Herzer and Peter Nunnenkamp

No 1762, Kiel Working Papers from Kiel Institute for the World Economy (IfW)

Abstract: This paper examines the long-run effect of foreign aid on income inequality for 21 recipient countries using panel cointegration techniques to control for omitted variable and endogeneity bias. We find that aid exerts an inequality increasing effect on income distribution.

Keywords: inequality; foreign aid; panel data; cointegration (search for similar items in EconPapers)
JEL-codes: D31 F35 C23 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1762

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