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Foreign Aid's Impact on Income Inequality

Lundqvist, Jenny LU (2014) NEKH01 20141
Department of Economics
Abstract
Despite indications that inequality can have a large impact on development, little research on the relationship between foreign aid and inequality exists. The majority of the studies on the subject also focus on overall aid figures, thereby leaving the question of whether the purpose of aid matters unexplored. This study uses panel data on 116 countries over the time period 1972-2011 to focus on whether aid affects inequality, and in particular whether the effect in that case depends on the type of aid. Aid is therefore separated into four statistically valid categories: economic, social, reconstructional and residual. The results indicate that a relationship exists between all four categories of aid and inequality, and that the purpose of... (More)
Despite indications that inequality can have a large impact on development, little research on the relationship between foreign aid and inequality exists. The majority of the studies on the subject also focus on overall aid figures, thereby leaving the question of whether the purpose of aid matters unexplored. This study uses panel data on 116 countries over the time period 1972-2011 to focus on whether aid affects inequality, and in particular whether the effect in that case depends on the type of aid. Aid is therefore separated into four statistically valid categories: economic, social, reconstructional and residual. The results indicate that a relationship exists between all four categories of aid and inequality, and that the purpose of aid does matter. Economic and social aid show a positive relationship to inequality, while reconstructional and residual aid display a negative one. (Less)
Please use this url to cite or link to this publication:
author
Lundqvist, Jenny LU
supervisor
organization
course
NEKH01 20141
year
type
M2 - Bachelor Degree
subject
keywords
Inequality, Foreign aid, Panel data
language
English
id
4394169
date added to LUP
2014-04-23 12:37:37
date last changed
2014-04-24 10:37:12
@misc{4394169,
  abstract     = {{Despite indications that inequality can have a large impact on development, little research on the relationship between foreign aid and inequality exists. The majority of the studies on the subject also focus on overall aid figures, thereby leaving the question of whether the purpose of aid matters unexplored. This study uses panel data on 116 countries over the time period 1972-2011 to focus on whether aid affects inequality, and in particular whether the effect in that case depends on the type of aid. Aid is therefore separated into four statistically valid categories: economic, social, reconstructional and residual. The results indicate that a relationship exists between all four categories of aid and inequality, and that the purpose of aid does matter. Economic and social aid show a positive relationship to inequality, while reconstructional and residual aid display a negative one.}},
  author       = {{Lundqvist, Jenny}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Foreign Aid's Impact on Income Inequality}},
  year         = {{2014}},
}