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Has Aid Helped in Pakistan?

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  • Shahrukh Rafi Khan

    (Sustainable Development Policy Institute, Islamabad.)

Abstract

This paper has a two-fold objective: first, to examine the terms on which Pakistan receives aid and whether its debt situation is sustainable, and second, to examine the impact of aid and debt on economic growth. It is found that there is little encouraging that can be said about how the terms on which Pakistan has received aid over time have changed, and its current debt situation is not sustainable. Also reported is the analysis done elsewhere which shows that aid has a negative (Granger) causal impact on GDP, and aid has a robust negative impact on economic growth after controlling for supplyside shocks. We provide various reasons for this negative association.

Suggested Citation

  • Shahrukh Rafi Khan, 1997. "Has Aid Helped in Pakistan?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 36(4), pages 947-957.
    • Handle: RePEc:pid:journl:v:36:y:1997:i:4:p:947-957
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    File URL: http://www.pide.org.pk/pdf/PDR/1997/Volume4/947-957.pdf
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    References listed on IDEAS

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    1. Griffin, Keith B & Enos, J L, 1970. "Foreign Assistance: Objectives and Consequences," Economic Development and Cultural Change, University of Chicago Press, vol. 18(3), pages 313-327, April.
    2. János Kornai, 2014. "The soft budget constraint," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 25-79, November.
    3. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    4. Khan, Haider Ali & Hoshino, Eiichi, 1992. "Impact of foreign aid on the fiscal behavior of LDC governments," World Development, Elsevier, vol. 20(10), pages 1481-1488, October.
    5. A. R. Kemal, 1992. "Self-Reliance and the Implications for Growth and Resource Mobilisation," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(4), pages 1101-1110.
    6. Salim Chishti & Aynul Hasan, 1992. "Foreign Aid, Defence Expenditure and Public Investment in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(4), pages 895-908.
    7. Fry, Maxwell J., 1992. "Some stabilizing and destabilizing effects of foreign debt accumulation in developing countries," Economics Letters, Elsevier, vol. 39(3), pages 315-321, July.
    8. Mark McGillivray & Howard White & Afzal Ahmad*, 1995. "EVALUATING THE EFFECTIVENESS OF STRUCTURAL ADJUSTMENT POLICIES ON MACROECONOMIC PERFORMANCE: A Review of tho Evidence with Special Reference to Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 11, pages 57-76.
    9. Sims, Christopher A, 1972. "Money, Income, and Causality," American Economic Review, American Economic Association, vol. 62(4), pages 540-552, September.
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    Cited by:

    1. Muhammad Javid & Abdul Qayyum, 2011. "Foreign Aid and Growth Nexus in Pakistan: The Role of Macroeconomic Policies," PIDE-Working Papers 2011:72, Pakistan Institute of Development Economics.
    2. Matthew McCartney, 2011. "Pakistan, Growth, Dependency, and Crisis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(Special E), pages 71-94, September.
    3. Ahmed, Vaqar & Wahab, Mohammad Abdul, 2011. "Foreign assistance and economic growth: evidence from Pakistan 1972 - 2010," MPRA Paper 30344, University Library of Munich, Germany.
    4. Shagufta Sultana, "undated". "Does Foreign Aid Affect Economic Growth In Pakistan? A Disaggregate Analysis," Review of Socio - Economic Perspectives 201945, Reviewsep.
    5. Eatzaz Ahmad, 2011. "A Qualitative Analysis of Pakistan’s External and Internal Debt," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(Special E), pages 123-157, September.
    6. Ahmed, Vaqar & Wahab Siddiqui, Abdul, 2010. "Nexus between aid and security: the case of Pakistan," MPRA Paper 29310, University Library of Munich, Germany.

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