On the channels of foreign aid to corruption

Arbeitspapier

The debate by Okada & Samreth (2012, EL) and Asongu (2012, EB; 2013, EEL) on 'the effect of foreign aid on corruption' in its current state has the shortcoming of modeling corruption as a direct effect of development assistance. This note extends the debate by assessing the channels of foreign aid to corruption in 53 African countries for the period 1996-2010. Two main findings are established to unite the two streams of the debate. (1) Foreign aid channeled through government's consumption expenditure increases corruption. (2) Development assistance channeled via private investment and tax effort decreases corruption. It follows that foreign aid that is targeted towards reducing corruption should be channeled via private investment and tax effort, not through government expenditure. Our results integrate an indirect component and reconcile the debate by showing that, the effect could either be positive or negative depending on the transmission channel.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: AGDI Working Paper ; No. WP/13/018

Classification and Topics

• Classification: Wirtschaft ; History of Economic Thought since 1925: General ; Foreign Aid ; International Relations, National Security, and International Political Economy: General ; Economic Development: General ; Economywide Country Studies: Africa
• Subject: Foreign Aid ; Political Economy ; Development ; Africa

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Asongu, Simplice A. ; Jellal, Mohamed
• Event: Veröffentlichung
• (who): African Governance and Development Institute (AGDI)
• (where): Yaoundé
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/123592
• Last update: 10.03.2025, 11:43 AM CET