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Aid Dependence and the Quality of Governance: Cross‐Country Empirical Tests
Abstract
Aid dependence can potentially undermine the quality of governance and public sector institutions by weakening accountability, encouraging rent‐seeking and corruption, fomenting conflict over control of aid funds, siphoning off scarce talent from the bureaucracy, and alleviating pressures to reform inefficient policies and institutions. Analyses of cross‐country data in this paper provide evidence that higher aid levels erode the quality of governance, as measured by indices of bureaucratic quality, corruption, and the rule of law. These findings support the need for donors to develop less costly and less intrusive ways of disseminating state‐of‐the‐art knowledge on public sector reform in developing countries.
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Cites
Institutions, Institutional Change and Economic Performance
North, D. C. (1990) · doi:10.1017/cbo9780511808678 · Cited by 32,691
La Porta, R. (1999) · Journal of Law, Economics, and Organization · doi:10.1093/jleo/15.1.222 · Cited by 5,699
Cited by
Measuring state capacity: Theoretical and empirical implications for the study of civil conflict
Hendrix, C. S. (2010) · Journal of Peace Research · doi:10.1177/0022343310361838 · Cited by 795
Hodler, R., & Raschky, P. A. (2014) · The Quarterly Journal of Economics · doi:10.1093/qje/qju004 · Cited by 709
Donor fragmentation and bureaucratic quality in aid recipients
Knack, S., & Rahman, A. (2007) · Journal of Development Economics · doi:10.1016/j.jdeveco.2006.02.002 · Cited by 466
Self-citationChinese aid and local corruption
Isaksson, A.-S., & Kotsadam, A. (2018) · Journal of Public Economics · doi:10.1016/j.jpubeco.2018.01.002 · Cited by 359
Violent conflicts and state capacity: Evidence from Sub-Saharan Africa
Babajide, A., Ahmad, A. H., & Coleman, S. (2021) · Journal of Government and Economics · doi:10.1016/j.jge.2021.100019 · Cited by 34
Metadata
- Authors
- Knack, S.
- Venue
- Southern Economic Journal
- Publisher
- Wiley
- Published
- 2001-10
- Volume
- 68
- Issue
- 2
- Pages
- 310-329
- ISSN
- 0038-4038 (ISSN-L)
- 2325-8012
- OpenAlex
- W2084089330
- Cited by
- 737
- References
- 2
- FWCI
- 37.73
- Type
- journal article
- Language
- en
- Open access
- closed
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