Aid effectiveness under different environments*
| Time invariant country characteristics | Institutional quality | Aid/GDP ratio (median) | GDP growth | |||||
|---|---|---|---|---|---|---|---|---|
| Dependent variable: Investment/GDP | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) |
| Favorable | Unfavorable | High | Low | High | Low | High | Low | |
| >=3.7 | <3.7 | >=2.0 | <2.0 | >=4.13 | <4.13 | |||
| Aid | 0.49*** (0.10) | 0.09 (0.13) | 0.43*** (0.10) | 0.17 (0.11) | 0.30*** (0.08) | 0.61* (0.33) | 0.57*** (0.12) | 0.08 (0.11) |
| Domestic savings | 0.40*** (0.04) | 0.26*** (0.05) | 0.47*** (0.08) | 0.35*** (0.04) | 0.34*** (0.05) | 0.37*** (0.05) | 0.34*** (0.07) | 0.37*** (0.04) |
| External debt | 0.005 (0.006) | −0.02 (0.01) | −0.03** (0.01) | −0.006 (0.005) | −0.004 (0.01) | −0.04*** (0.01) | −0.02 (0.02) | −0.01 (0.01) |
| Trade openness | 0.12*** (0.02) | 0.11*** (0.02) | 0.10*** (0.02) | 0.14*** (0.02) | 0.15*** (0.02) | 0.07*** (0.02) | 0.06** (0.03) | 0.15*** (0.02) |
| GDP-growth | 0.36*** (0.05) | 0.42*** (0.08) | 0.50*** (0.08) | 0.32*** (0.08) | 0.22** (0.07) | 0.48*** (0.08) | 0.32*** (0.12) | 0.35*** (0.09) |
| AR term | 0.74*** (0.02) | 0.69*** (0.03) | 0.76*** (0.03) | 0.68*** (0.03) | 0.73*** (0.03) | 0.72*** (0.02) | 0.75*** (0.03) | 0.71*** (0.03) |
| Country fixed effects | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| R² | 0.86 | 0.77 | 0.86 | 0.77 | 0.83 | 0.84 | 0.84 | 0.87 |
| Durbin-Watson | 1.84 | 1.90 | 1.87 | 1.89 | 1.96 | 1.68 | 1.84 | 1.91 |
| Obs. | 1,533 | 950 | 924 | 992 | 1,498 | 1,015 | 1,286 | 1,189 |
| Cross-sections | 53 | 36 | 32 | 33 | 54 | 36 | 45 | 44 |
| Time invariant country characteristics | Institutional quality | Aid/GDP ratio (median) | GDP growth | |||||
|---|---|---|---|---|---|---|---|---|
| Dependent variable: Investment/GDP | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) |
| Favorable | Unfavorable | High | Low | High | Low | High | Low | |
| >=3.7 | <3.7 | >=2.0 | <2.0 | >=4.13 | <4.13 | |||
| Domestic savings | 0.40*** (0.04) | 0.26*** (0.05) | 0.47*** (0.08) | 0.35*** (0.04) | 0.34*** (0.05) | 0.37*** (0.05) | 0.34*** (0.07) | 0.37*** (0.04) |
| External debt | 0.005 (0.006) | −0.02 (0.01) | −0.03** (0.01) | −0.006 (0.005) | −0.004 (0.01) | −0.04*** (0.01) | −0.02 (0.02) | −0.01 (0.01) |
| Trade openness | 0.12*** (0.02) | 0.11*** (0.02) | 0.10*** (0.02) | 0.14*** (0.02) | 0.15*** (0.02) | 0.07*** (0.02) | 0.06** (0.03) | 0.15*** (0.02) |
| GDP-growth | 0.36*** (0.05) | 0.42*** (0.08) | 0.50*** (0.08) | 0.32*** (0.08) | 0.22** (0.07) | 0.48*** (0.08) | 0.32*** (0.12) | 0.35*** (0.09) |
| AR term | 0.74*** (0.02) | 0.69*** (0.03) | 0.76*** (0.03) | 0.68*** (0.03) | 0.73*** (0.03) | 0.72*** (0.02) | 0.75*** (0.03) | 0.71*** (0.03) |
| Country fixed effects | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
| 0.86 | 0.77 | 0.86 | 0.77 | 0.83 | 0.84 | 0.84 | 0.87 | |
| Durbin-Watson | 1.84 | 1.90 | 1.87 | 1.89 | 1.96 | 1.68 | 1.84 | 1.91 |
| Obs. | 1,533 | 950 | 924 | 992 | 1,498 | 1,015 | 1,286 | 1,189 |
| Cross-sections | 53 | 36 | 32 | 33 | 54 | 36 | 45 | 44 |
Notes:
*Based on the “full” model; These estimations include country fixed effects. Control for Endogeneity via DOLS, autocorrelation via DFGLS technique (Prais-Winsten transformation). Robust standard errors in parentheses
Sharing content requires targeting cookies to be enabled. Please update your cookie preferences to use this feature.