“…Barro [1991] has found a negative significant relationship between government consumption share and growth. Economic instability, measured by the coefficient of variation in per capita real GDP, has also a negative significant effect on growth [Islam and Winer, 2004]. The income dummy is added because aid does not necessarily have same effect on growth in countries with different levels of per capita income [see Burnside and Dollar, 2000].…”
Section: T a B L E 4 F I X E D E F F E C T S E S T I M A T I O N O F mentioning
This study finds that on average aid has little impact on economic growth, although a robust finding is that aid promotes growth only in a politically stable environment irrespective of the quality of the country's economic policies. Aid is ineffective in an unstable environment even in the presence of good policies. The results, however, indicate that policy is more effective in promoting growth when supported by increased aid flows rather than aid being more effective in good policy environment. The empirical results also provide some tentative support for the presence of an aid Laffer curve in the politically stable countries. The allocation of aid is found to be influenced by the country size and its state of development, rather than the quality of policy.
“…Barro [1991] has found a negative significant relationship between government consumption share and growth. Economic instability, measured by the coefficient of variation in per capita real GDP, has also a negative significant effect on growth [Islam and Winer, 2004]. The income dummy is added because aid does not necessarily have same effect on growth in countries with different levels of per capita income [see Burnside and Dollar, 2000].…”
Section: T a B L E 4 F I X E D E F F E C T S E S T I M A T I O N O F mentioning
This study finds that on average aid has little impact on economic growth, although a robust finding is that aid promotes growth only in a politically stable environment irrespective of the quality of the country's economic policies. Aid is ineffective in an unstable environment even in the presence of good policies. The results, however, indicate that policy is more effective in promoting growth when supported by increased aid flows rather than aid being more effective in good policy environment. The empirical results also provide some tentative support for the presence of an aid Laffer curve in the politically stable countries. The allocation of aid is found to be influenced by the country size and its state of development, rather than the quality of policy.
“…4 Wintrobe (1998) describes the choice between buying loyalty and repression that confronts an authoritarian ruler. Evidence confirming Wintrobe's categorizations of behavior of authoritarian regimes is provided by Islam and Winer (2004). For a case where only extreme repression is chosen, see Verwimp (2003).…”
“…(1) and (2), Islam and Winer (2004) derive the effects of economic growth on freedom in non-democratic regimes. I briefly outline here how they analyse the effects of positive and negative economic growth on the level of freedom in tinpots and totalitarians 9 and then turn to the derivation of the effects of growth on public spending in non-democratic regimes.…”
Section: Some Stylised Factsmentioning
confidence: 99%
“…However, a substantial decline in the GDP growth rate, even when the growth rate remains positive, may indicate a decline in economic performance. Given the imprecision of the theory on this point, as Islam and Winer (2004) note, associating bad performance with negative growth would represent a conservative test of the theory. While the growth performance of a given country is undoubtedly important in expenditure allocation decisions, this study uses the average growth performance of neighbouring countries as a benchmark in deriving a theoretical link between growth and spending.…”
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