Theses and Dissertations

Issuing Body

Mississippi State University

Advisor

Randal Campbell

Committee Member

Claudia Williamson

Committee Member

Brandon Cline

Committee Member

Cheng Li

Committee Member

Travis Wiseman

Date of Degree

8-6-2021

Original embargo terms

Worldwide

Document Type

Dissertation - Open Access

Major

Applied Economics

Degree Name

Doctor of Philosophy

College

College of Business

Department

Department of Finance and Economics

Abstract

The literature has shown that aggregate aid is mostly ineffective (Doucouliagos and Paldam, 2011). However, new studies on foreign aid also show that the effect of aid depends on both aid type and the donor type (Clemens et al., 2012; Isaksson and Kotsadam, 2018). Thus, the first essay investigates the impact of education aid on educational outcomes. The study uses panel data for 83 developing countries from 2000-2014 to examine World Bank education aid. The results suggest that there is no robust evidence that education aid is effective in improving educational outcomes. The paper finds some evidence that aid improves enrollment rates in primary and secondary but not tertiary education. The results show that aid's effectiveness is determined, to a large extent, by the type of aid and the economic outcomes aid targeted. Likewise, the second essay examines whether specific types of aid are more effective across different donors. The study uses factor analysis to separate aid flows into interpretable categories, economic purposes, social purposes, and infrastructure. In addition, the study compares three donors, the World Bank, the U.S., and China. Examining the growth effect of each aid type for each donor shows that the impacts depend on aid type. All the aid types are positive irrespective of the donor, though only the U.S. aid types show some improvements economic growth. The Chinese economic aid is a complement of the World Bank economic aid. However, the Chinese social aid and the World Bank social aid are both substitutes. Both studies show that most foreign aid to developing countries is not effective, but disaggregating aid by type can lead to moderate improvements in developing countries.

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