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International aid corruption and fiscal behavior policy

Author

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  • Asongu, Simplice
  • Jellal, Mohamed
Abstract
The Okada & Samreth (2012, EL) and Asongu (2012, EB; 2013, EEL) debate on ‘the effect of foreign aid on corruption’ has had an important influence in policy and academic circles. This paper provides a unifying framework by using investment and fiscal behavior transmission channels in 53 African countries for the period 1996-2010. The richness of the dataset enables us to disaggregate countries into 16 panels depicting fundamental characteristics of corruption based on wealth-effects, legal origins, openness to sea, petroleum-exporting, regional proximity and religious domination. Findings unite the two streams of the debate and broadly suggest that while the ‘government’s final consumption expenditure’ channel is consistent with the latter author, the investment and tax effort channels are in line with the former authors. Justifications for the nexuses are provided. Policy implications on how to use foreign aid constraints in managing fiscal behavior as means of reducing (increasing) corruption (corruption-control) are discussed.

Suggested Citation

  • Asongu, Simplice & Jellal, Mohamed, 2014. "International aid corruption and fiscal behavior policy," MPRA Paper 57192, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57192
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    File URL: https://mpra.ub.uni-muenchen.de/57192/1/MPRA_paper_57192.pdf
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    References listed on IDEAS

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    Cited by:

    1. Simplice Asongu & Mohamed Jellal, 2014. "Foreign aid, investment and fiscal policy behavior: theory and empirical evidence," Working Papers of the African Governance and Development Institute. 14/030, African Governance and Development Institute..

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    More about this item

    Keywords

    Foreign Aid; Political Economy; Development; Africa;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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