An Investigation of the Effects of the Official Development Assistance on GDP Per Capita in Pakistan

Abstract

The paper investigates the influence of official development support on Pakistan GDP per capita making use of time series yearly data from 1991 to 1917. ADF has been used for examining the level of integration of the data. After that, ARDL has been used for discovering the short and long-run relationship of the official development assistance and the GDP per capita. The results uncover that official assistance relationship with GDP per capita became negative in the short run in addition to a long-run period. In similar manner inflation also became negatively significant in the short and long run. Additionally, lag GDP per capita is positively significant. Population growth turned positively significant in the long run. In addition, it has become negatively significant in the short-run period of time. Furthermore, the Error Correction coefficient is –0. 83% and remained significant

Assessing economic effects of foreign aid and capital flows on real economic growth

“…In her book titled, "Dead aid" she argues that foreign aid does not progress economic growth, but instead tends to promote rentseeking and on many occasions, serves the interest of the elite instead of the overall economy (Moyo, 2009). Synchronously to the assertion of Moyo, a study by Tariq, and Ali, (2019), found a negative relationship between official development assistance and real economic growth in Pakistan. They employed ARDL methodology for analysis.…”