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Does state capacity matter for foreign aid effectiveness? Panel data evidence on water from 87 countries

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  • Masood Ahmed

Abstract

This study attempts to measure how the effectiveness of aid to the drinking water sector is mediated by state capacity. I use panel data on a sample of 87 aid-receiving countries, with the Bureaucratic Quality Index as a measure of state capacity. Employing random effects, fixed effects, and system GMM techniques, the study empirically and robustly finds that state capacity does not have a significant positive mediating impact on aid effectiveness in increasing access to improved water sources. I also find that the mediating impact of state capacity is contingent on the level of democracy in aid-receiving countries.

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  • Masood Ahmed, 2020. "Does state capacity matter for foreign aid effectiveness? Panel data evidence on water from 87 countries," Water International, Taylor & Francis Journals, vol. 45(5), pages 479-496, July.
    • Handle: RePEc:taf:rwinxx:v:45:y:2020:i:5:p:479-496
    DOI: 10.1080/02508060.2020.1774317
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    Cited by:

    1. Ali Fisunoglu & Kyungkook Kang & Tad Kugler & Marina Arbetman-Rabinowitz, 2023. "Relative political capacity: A dataset to evaluate the performance of nations, 1960–2018," Conflict Management and Peace Science, Peace Science Society (International), vol. 40(3), pages 325-345, May.

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