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Foreign aid and growth in Egypt: The role of economic policy

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  • Emara, Noha
  • Plotkin, David
  • Stein, Alyssa

Abstract

The relationship between foreign aid and the economic growth of developing countries is unquestionably an intricate one. While a newcomer to the topic might expect to find an obvious effect of aid on growth, the overwhelming majority of the literature in this field does not conclude its studies with such findings. Some research simply argues that aid has a negative relationship on growth, while some holds the claim that a positive relationship is attainable, yet only with sound economic policies and strong institutions in place on the end of the receiving country. Using an Autoregressive Distributed Lag (ARDL) methodology, the study estimates the effectiveness of aid in Egypt over the period from 1960 to 2010. Different components of the existing material on the various and complex aid-policy growth relationships will be brought together and broken down. The study will use these findings to suggest an optimal foreign aid plan of action for Egypt’s economic growth efforts.

Suggested Citation

  • Emara, Noha & Plotkin, David & Stein, Alyssa, 2013. "Foreign aid and growth in Egypt: The role of economic policy," MPRA Paper 68687, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68687
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    File URL: https://mpra.ub.uni-muenchen.de/68687/1/MPRA_paper_68687.pdf
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    References listed on IDEAS

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    1. Kourtellos, Andros & Tan, Chih Ming & Zhang, Xiaobo, 2007. "Is the relationship between aid and economic growth nonlinear?," Journal of Macroeconomics, Elsevier, vol. 29(3), pages 515-540, September.
    2. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 17-41.
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    4. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398, April.
    5. Michael A. Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting chickens when they hatch: The short-term effect of aid on growth," International Finance 0407010, University Library of Munich, Germany.
    6. Arellano, Cristina & Bulír, Ales & Lane, Timothy & Lipschitz, Leslie, 2009. "The dynamic implications of foreign aid and its variability," Journal of Development Economics, Elsevier, vol. 88(1), pages 87-102, January.
    7. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
    8. Mosley, Paul, 1980. "Aid, Savings and Growth Revisited," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 42(2), pages 79-95, May.
    9. Robert Lensink & Howard White, 2000. "Assessing Aid: A Manifesto for Aid in the 21st Century?," Oxford Development Studies, Taylor & Francis Journals, vol. 28(1), pages 5-18.
    10. Eskander Alvi & Debasri Mukherjee & Elias Kedir Shukralla, 2008. "Aid, Policies, and Growth in Developing Countries: A New Look at the Empirics," Southern Economic Journal, John Wiley & Sons, vol. 74(3), pages 693-706, January.
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    Cited by:

    1. Ismahene Yahyaoui & Najeh Bouchoucha, 2020. "Foreign Aid-Growth Nexus in Africa: Do Institutions Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(4), pages 1663-1689, December.
    2. Hassan, Mai, 2017. "The impact of the shadow economy on aid and economic development nexus in Egypt," MPRA Paper 80990, University Library of Munich, Germany.

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    More about this item

    Keywords

    Foreign Aid; Egypt; Policies; Institutions; Autoregressive Distributed Lag;
    All these keywords.

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • F35 - International Economics - - International Finance - - - Foreign Aid

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