Economic Research and Perspectives

Economic Research and Perspectives

Impacts of Official Development Assistance on Government Fiscal Behavior in the Selected Asian Developing Countries

Authors
Sadegh Bakhtiari 1
Seyed Komail Tayebi 2
Seyed Komail Tayebi 2
Hojjat Izadkhasti 3
Hojjat Izadkhasti 3
1 Professor of Economics, Islamic Azad University, Khorasgan Branch, Isfahan, Iran
2 Professor of Economics, University of Isfahan
3 Ph.D. Student of Economics, University of Isfahan
Abstract
This paper examines the impact of official development assistance on government fiscal behavior in the Selected Asian developing countries by using Panel Data over the period 1990-2009. The aim of official development assistance is to help developing countries to speed up economic growth and development, income distribution and poverty reduction. But official development assistance is mainly channeled to the domestic economy through the public sector. However, the economic effectiveness of official development assistance has always been a controversial issue. While some researchers argue that such aid results into the growth of bureaucracies, others argue that it can lead to economic growth. The final effects of official development assistance depend on how it influences fiscal policy. Empirical results indicate that official development assistance has a positive and significant effect on capital expenditures and does not have a significant effect on government consumption expenditures and government revenues. Also, official development assistance is a substitute for government borrowing.
Keywords
F3
H6
H5
H2
Government
Official development assistance
Developing countries . JEL Classification: C5
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Economic Research and Perspectives
Volume 12, Issue 2
Summer 2012
Pages 23-38