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Institutional Quality, Conflict and Aid Dependency

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  • Unbreen Qayyum

    (Pakistan Institute of Development Economics, Islamabad)

Abstract

This study attempts to explore the impact of foreign aid on the quality of governance and how conflicts, whether internal or external affect the overall situation. Conflicts affect governance directly by creating instability which adversely affects economic development as investment climate is fouled and output drops leading to fall in revenues. In this vicious cycle governance is left with no funds to improve institutional quality. Annual data from 1984 to 2010 have been used for the Asian developing economies. The results indicate a negative impact from the confluence of foreign aid in a climate of conflicts that leads to institutional deterioration. These results are robust for various alternative specifications.

Suggested Citation

  • Unbreen Qayyum, 2013. "Institutional Quality, Conflict and Aid Dependency," PIDE-Working Papers 2013:94, Pakistan Institute of Development Economics.
    • Handle: RePEc:pid:wpaper:2013:94
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    References listed on IDEAS

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    Cited by:

    1. Unbreen Qayyum & Hasan Siftain, 2014. "Governance and the Effectiveness of Foreign Capital," PIDE-Working Papers 2014:98, Pakistan Institute of Development Economics.

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    More about this item

    Keywords

    Official Development Assistance; Governance; Conflict;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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