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Official Development Assistance, Public Investment and Economic Growth in Asia and the Pacific

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  • Chen, Hong
  • Singh, Baljeet

Abstract

Official development assistance contributes directly and indirectly through public investment to economic growth in least developed and developing countries. This study investigates the impacts of official development assistance and public investment on economic growth in 24 Asian and Pacific Island countries over the period from 1996 to 2012. Aid volatility, public investment volatility, and government revenue volatility are also considered in the aid-growth model to test for the respective effectiveness of aid and public investment. The system generalized method of moments estimator is employed to correct for potential endogeneity bias, as well as potential bias arising from country specific fixed effects. While variation in aid proves a favorable contributor to economic growth, aid's impact is mitigated by public investment volatility.

Suggested Citation

  • Chen, Hong & Singh, Baljeet, 2016. "Official Development Assistance, Public Investment and Economic Growth in Asia and the Pacific," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 6(2), pages 73-96.
    • Handle: RePEc:gok:ijdcv1:v:6:y:2016:i:2:p:73-96
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    References listed on IDEAS

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