The Effectiveness of aid in Improving Regulations: An Empirical Assessment

Show simple item record Busse, M. Hoekstra, R. Osei, R.D. 2019-02-08T16:24:14Z 2019-02-08T16:24:14Z 2017
dc.identifier.citation Busse, Matthias & Hoekstra, Ruth & Osei, Robert. (2015). The Effectiveness of Aid in Improving Regulations An Empirical Assessment. SSRN Electronic Journal. 10.2139/ssrn.2566458. en_US
dc.identifier.other DOI: 10.2139/ssrn.2566458
dc.description.abstract The paper empirically assesses the impact of foreign aid on the change in economic freedom, which is closely related to the quality of regulations. We build on a relatively large panel of 77 developing countries and examine the period 2002-2012 using different econometric methods. In addition to standard country fixed-effects regressions as well as estimations in first differences, we apply the system Generalised Method of Moments estimator. We, therefore, control for the potential endogeneity of foreign aid. We find that highly targeted aid can be a driver of change: Sectorspecific Aid for Business has a significantly positive impact on regulations across developing countries, but we do not find any effects for overall aid or aid directed at broad governance areas. The result that Aid for Business drives improvements in regulatory quality is robust using different model specifications and country samples. The strongest results are found for low-income countries and for subsamples that exclude outliers. This outcome could partly explain the inconclusive evidence from the previous literature and it confirms our hypothesis that targeted, sector-specific aid matters. en_US
dc.language.iso en en_US
dc.subject Empirical Assessment en_US
dc.subject Aid en_US
dc.subject economic freedom en_US
dc.subject regulations en_US
dc.title The Effectiveness of aid in Improving Regulations: An Empirical Assessment en_US
dc.type Article en_US

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