Foreign aid and political instability in resource-rich countries

Ravetti, Chiara; Sarr, Mare; Swanson, Timothy

doi:10.1016/j.resourpol.2018.05.017

Cited by 11 publications

(4 citation statements)

References 59 publications

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“…Therefore, the control of corruption in the Worldwide Governance Indicators (WGI) index is considered an important factor that can affect development in the regression (WGI, n.d.). Natural resources, on the one hand, are valuable endowments that promote economic growth (Brunnschweiler & Bulte, 2008;Ding & Field, 2005), but they could also be a "curse" for resourcerich countries, linked to slower economic growth (Djankov et al, 2008;Morrison, 2012;Ravetti et al, 2018;Ross, 1999;Sachs & Warner, 1996). Moreover, in recent years, researchers have become increasingly concerned about the relationship between aid and natural resources (Dreher & Fuchs, 2015;Fuchs & Vadlamannati, 2012).…”

Section: Methodsmentioning

confidence: 99%

Aid instability, aid effectiveness and economic growth

Liu

2021

Development Policy Review

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The rising concern regarding the impact of foreign aid on growth remains highly controversial. Despite massive inflows, foreign aid has been far less effective than expected. Much of the academic research on aid effectiveness has focused on the instability of aid flows over time, which can be considered a key cyclical property of external aid flows. Foreign aid appears to be more erratic than fiscal revenues, and aid commitments lack credibility (Bulíř & Hamann, 2003. The instability of aid flows can be classified into two categories, specifically deviations from a long-term trend and deviations from

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Section: Methodsmentioning

confidence: 99%

Aid instability, aid effectiveness and economic growth

Liu

2021

Development Policy Review

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“…According to the various research findings, aid can be harmful to recipients when it makes up from 5 to 15.45% of a country's GDP (Moss et al 2006: 19). Particularly relevant to Kyrgyzstan's case is research that proves that a combination of resource extraction and dependence on aid flows is associated with political instability and the resignation of leaders as a result of popular protest or coups (Ravetti et al 2018).…”

Section: Theoretical Framework: Rentier State Theory Unearned Income ...mentioning

confidence: 99%

Governance problems in Kyrgyzstan: rentier state and building resilience (1991-2018)

Umarov

2024

Shifting Security and Power Constellations in Central Asia and the Caucasus

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“…On the other hand, the inflows of ODA are other key components of development policies. However, the literature has revealed the existence of “perverse effects” of aid (Quazi, 2004; Asongu, 2012; Ravetti et al , 2018; Steinkamp and Westermann, 2021) as well as settings in which the ineffectiveness of development aid was evident (Dreher et al , 2015; Minasyan et al , 2017). Further evidence has recently been obtained of “aid in reverse”, which leads to aid-fuelled illicit capital flight from recipient countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Relationships between foreign direct investment and official development assistance with trade-related illicit financial flows. Evidence from low- and middle-income countries

Ortega

Sanjuán

2023

JMLC

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Purpose This paper aims to analyse empirically the association between flows of foreign direct investment (FDI), net official development assistance (ODA) inflows and trade-related illicit financial outflows. Design/methodology/approach With this purpose, a linear model was estimated, using different panel-data estimators, and using a database for a sample of 49 countries spanning the period 2008–2017. The used measure of illicit financial outflows was based on the estimates by Global Financial Integrity of deliberate misinvoicing in merchandise trade. Findings Research findings show a significant and positive association between changes in both relative lagged net FDI flows and relative FDI outflows (as % of gross domestic product) and changes in the ratio of trade-related illicit capital outflows to total trade. However, these positive associations were only observed in the case of low-income countries. Also, the positive association of net ODA inflows on the IFFT outflows were restricted to the cluster of lower-middle-income countries. Originality/value To the best of the authors’ knowledge, this is one of the first studies to empirically estimate the association between FDI and ODA flows and trade misinvoicing at a macroeconomic level. Research findings may contribute to substantiate the concerns expressed in previous research about the potential unintended effects of aid on illicit capital flight in the case of lower-middle-income countries. They also shown that FDI flows could be an additional conduit for trade-related illicit financial flows in these countries

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Foreign aid and political instability in resource-rich countries

Cited by 11 publications

References 59 publications

Aid instability, aid effectiveness and economic growth

Aid instability, aid effectiveness and economic growth

Governance problems in Kyrgyzstan: rentier state and building resilience (1991-2018)

Relationships between foreign direct investment and official development assistance with trade-related illicit financial flows. Evidence from low- and middle-income countries

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