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Aid, Development and the Role of Culture

McShane, Karl LU (2011) NEKM01 20111
Department of Economics
Abstract (Swedish)
The role of culture is often overlooked in economics. Despite culture permeating every part of society and differing greatly between countries, economists have had little time for it. However, as economics slowly move away from the neoclassical assumptions of perfectly functioning markets, culture is becoming more and more relevant. The aim of this thesis is to look into the connections between culture, development and foreign aid. Through the use of panel regressions these connections are investigated between 58 countries over 30 years. As opposed to many previous studies, including Burnside and Dollar (2000 and 2004), Dollar and Collier (2001 and 2002) and Kosack (2003), both time and country specific effects are used. Three parameters... (More)
The role of culture is often overlooked in economics. Despite culture permeating every part of society and differing greatly between countries, economists have had little time for it. However, as economics slowly move away from the neoclassical assumptions of perfectly functioning markets, culture is becoming more and more relevant. The aim of this thesis is to look into the connections between culture, development and foreign aid. Through the use of panel regressions these connections are investigated between 58 countries over 30 years. As opposed to many previous studies, including Burnside and Dollar (2000 and 2004), Dollar and Collier (2001 and 2002) and Kosack (2003), both time and country specific effects are used. Three parameters are used for measuring culture and three parameters are used for measuring development. As a robustness check the sample is divided three times into different groups. The results found give some support for the hypothesis that culture matters for development and aid efficiency although the exact relationship is still unclear. The most consistent result is that countries who benefit from a religious culture at the same time become less efficient at handling aid the more religious they are and vice versa. This implies that not only is there a connection between aid efficiency and culture, but a rather complex one at that. This leaves room for further investigation into the subject. (Less)
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author
McShane, Karl LU
supervisor
organization
course
NEKM01 20111
year
type
H1 - Master's Degree (One Year)
subject
keywords
Aid conditionality, Development aid, Culture, Achievement motivation
language
English
id
2153008
date added to LUP
2011-09-27 09:19:51
date last changed
2011-09-27 09:19:51
@misc{2153008,
  abstract     = {The role of culture is often overlooked in economics. Despite culture permeating every part of society and differing greatly between countries, economists have had little time for it. However, as economics slowly move away from the neoclassical assumptions of perfectly functioning markets, culture is becoming more and more relevant. The aim of this thesis is to look into the connections between culture, development and foreign aid. Through the use of panel regressions these connections are investigated between 58 countries over 30 years. As opposed to many previous studies, including Burnside and Dollar (2000 and 2004), Dollar and Collier (2001 and 2002) and Kosack (2003), both time and country specific effects are used. Three parameters are used for measuring culture and three parameters are used for measuring development. As a robustness check the sample is divided three times into different groups. The results found give some support for the hypothesis that culture matters for development and aid efficiency although the exact relationship is still unclear. The most consistent result is that countries who benefit from a religious culture at the same time become less efficient at handling aid the more religious they are and vice versa. This implies that not only is there a connection between aid efficiency and culture, but a rather complex one at that. This leaves room for further investigation into the subject.},
  author       = {McShane, Karl},
  keyword      = {Aid conditionality,Development aid,Culture,Achievement motivation},
  language     = {eng},
  note         = {Student Paper},
  title        = {Aid, Development and the Role of Culture},
  year         = {2011},
}