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The Effects of External Debt and Foreign Aid on Poverty in Developing Countries: An Investigation with Cross Section Analysis

Year 2018, Volume: 4 Issue: 1, 9 - 19, 01.03.2018

Abstract

The aim of this study investigates the relationship between external debt, foreign aid and poverty in developing countries. This study tests 102 developing countries with data for the year 2015 by using crosssectional analysis. Empirical findings of the study show that the rate of foreign aid utilization in developing countries has an effect of decreasing poverty and increasing the level of human development. The level of external indebtedness has been tested to be an effect of increasing poverty and reducing the level of human development. In general, research results have shown that the level of foreign aid is decreasing on poverty and the level of external indebtedness is the effect of increasing poverty

References

  • Akram Naeem and Abdul Hamid (2016), “Public Debt, Income Inequality and Macroeconomic Policies: Evidence From South Asian Countries”, Pakistan Journal of Social Sciences, 36(1), p. 99-108.
  • Alkire Sabina and Gisela Robles (2016), (Global Multidimensional Poverty Index 2016), OPHI Oxford Poverty & Human Development Initiative, www.ophi.org.uk, 11.05.2017.
  • Alvi Eskander and Aberra Senbeta (2012), “Does Foreign Aid Reduce Poverty?”, Journal of International Development, 24, P. 955-976.
  • Arshad Zeshan, Muhammad Zaid and Adnan Latif (2014), “Relative Effectiveness of Foreign Debt and Foreign Aid on Economic Growth in Pakistan”, Interdisciplinary Journal of Contemporary Research in Busness, 6(1), p. 51-67.
  • Asra Abuzar, Estrada Gemma, Kim Yangseon and M.G Quibra (2005), “Poverty and Foreign Aid Evidence from Recent Cross-country Data”, ERD Working Paper: 65, Asian Development Bank.
  • Bahmani-Oskooee Mohsen and Haharouf Oyolola (2009), “Poverty Reduction and Aid: Cross- country Evidence”, International Journal of Social Policy, 29(5/6), p.264-273.
  • Boone Peter (1996), “Politics and The effectiveness of Foreign Aid”, European Economic Review, 40(2), p. 289–329.
  • Calderon Cecilia M., Alberto Chong and Mark Gradstein and (2006), “Foreign Aid, Income Inequality, and Poverty”, Inter-American Development Bank, Working Paper 547, p.1- 30.
  • Chong Alberto, Mark Gradstein and Cecilia M. Calderon (2009), “Can Foreign Aid Reduce Income Inequality and Poverty?”, Public Choice, 140, p. 59–84.
  • Ekpo Akpan H. and Elijah Udo (2015), “Public Debt,G and Poverty Reduction in a Failed State: Nigeria 1970-2011”, Journal of Business and Economics, 6(5), p. 944-957.
  • Feeny Simon (2003), “The Impact of Foreign Aid on Poverty and Human Well-being in Papua New Guinea”, Asia Pacific Development Journal, 10(2), p. 73-93.
  • Görgülü Mehmet Emre (2016), “Dış Yardımların Ekonomik Büyüme Üzerine Etkileri”, İnsan ve Toplum Bilimleri Araştırmaları Dergisi, 5(5), s. 1292-1322.
  • Herzer Dierk and Peter Nunnenkamp (2012), “The Effect of Foreign Aid on Income Inequality: Evidence from Panel Cointegration”, Kiel Working Paper, No: 1762.
  • Ijaiya Gafar T. and Muftau A. Ijaiya (2004), “Foreign Aid and Poverty Reduction in Sub- Saharan Africa: A Cross-country Investigation”, South African Journal of Economic and Management Sciences, 7(3), p. 542-552.
  • Kaya, Ersin (2009), Yoksullukla Mücadelede Avrupa’nın ve Türkiye’nin Sosyal Yardım Modeli, Yayınlanmış Sosyal Yardım Uzmanlık Tezi, TC Başbakanlık Sosyal Yardımlaşma ve Dayanışma Genel Müdürlüğü, Ankara.
  • Krugman Paul R. (1988), “Financing Versus Forgiving a Debt Overhang”, Journal of Development Economics, 29(3), p. 253-68.
  • Loko Boileau, Montfort Mlachila, Faj Nallari and Kadima Kalonji (2003), The Impact of External Indebtedness on Poverty in Low-income Countries”, IMF Working Paper, WP/03/61.
  • Masud Nadia and BorianaYontcheva (2005), “Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid”, IMF Working Paper, WP/05/100.
  • Mba Peter N., Meriel Alali Bell-Gam and Peter S. Ubi (2012), “Interplay of Foreign Aid, External Debt and Economic Growth: The Nigeria Experience”, International Journal of Economics and Finance, 4(8), p. 177-185.
  • Nguena Christian-Lambert (2014), “External Debt Origin, Capital Flight and Poverty Reduction in the Franc Zone: Does the Economic Consequences of Sino-African Relationship Matter?”, African Governance and Development Institute, AGDI Working Paper WP/16/04.
  • Oyedele Stephen Oloruntoba, Apollos Ajevata Emerah and Samson Ogege (2013), “External Debt, Debt Servicing and Poverty Reduction in Nigeria: An Empirical Analysis”, Journal of Economics and Sustainable Development, 4(19), p. 174-179.
  • Philip Olofin O. (2013), “Foreign Aid and Poverty Level in West African Countries: New Evidence Using a Heterogeneous Panel Analysis”, Australian Journal of Business and Management Research, 3(4), p.9-18.
  • Sachs Jeffrey D., John W. McArthur, Guido Schmidt-Traub, Margaret Kruk, Chandrika Bahadur, Michael Faye and Gordon McCord (2004), “Ending Africa’s Poverty Trap”, Brookings Papers on Economic Activity, 35(1), p. 117-240.
  • Saungweme Talknice and Shylet Mufandaedza (2013), “An Empirical Analysis of the Effects of External Debt on Poverty in Zimbabwe: 1980-2011”, International Journal of Economic Research, 4(6), p.20-27.
  • Senbeta Aberra (2009), “Three Essays on Foreign Aid, Poverty and Growth”, Dissertations Paper 723, Western Michigan University, http://scholarworks.wmich.edu/dissertations: 21.04.2017.
  • The World Bank (2017a), International Debt Statistics, https://openknowledge.worldbank.org/bitstream/handle/10986/25697/.pdf, 29.03.2017.
  • The World Bank (2017b), World Development Indicators, http://data.worldbank.org/datacatalog/world-development-indicators, 29.03.2017.
  • Ugwuegbe Sebastine Ugochukwu, I.G Okafor and Christian Azino Akarogbe (2016), “Effect of External Borrowing and Foreign Aid on Economic Growth in Nigeria”, International Journal of Academic Research in Business and Social Sciences, 6(4), p. 155-175.
  • Umaru Aminu, Ahmadu Aminu Hamidu and Salihu Musa (2013), “External Debt and Domestic Debt Impact on the Growth of the Nigerian Economy”, International Journal Educational Research, 1(2), p. 70-85.
  • UNDP (United Nations Development Programme) (2016a), Human Development Report 2016, http://hdr.undp.org/sites/default/files/2016_human_development_report.pdf, 30.03.2017.
  • UNDP (United Nations Development Programme) (2016b), Human Development Data (1990- 2015), http://hdr.undp.org/en/data, 30.03.2017.
  • Woldekidan Hana (2015), “The Role of Foreign Aid in Reducing Poverty: Time Series Evidence from Ethiopia”, Journal of Economics and International Finance, 7(3), p. 59-71.
  • Wooldridge, Jeffrey M. (2001), Econometric Analysis of Cross Section and Panal Data, The MIT https://jrvargas.files.wordpress.com/, 01.04.2017. Cambridge, Massachusetts London, England
  • Yanar, Rüstem ve Ahmet Şahbaz (2013), “Gelişmekte Olan Ülkelerde Küreselleşmenin Yoksulluk ve Gelir Eşitsizliği Üzerindeki Etkileri”, Eskişehir Osmangazi Üniversitesi İİBF Dergisi, 8(3), s. 55-74.

Gelişmekte Olan Ülkelerde Dış Borçlanma ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme

Year 2018, Volume: 4 Issue: 1, 9 - 19, 01.03.2018

Abstract

Bu çalışmanın amacı, gelişmekte olan ülkelerde dış borçlanma, dış yardım ve yoksulluk arasındaki ilişkiyi araştırmaktır. Çalışmada 102 gelişmekte olan ülkenin 2015 yılı verileri kullanılarak, yatay kesit analizi ile test edilmiştir. Araştırmanın ampirik bulgularına göre, gelişmekte olan ülkelerde dış yardım kullanım oranının yoksulluğu azaltıcı ve insani gelişmişlik düzeyini de arttırıcı etkisi vardır. Dış borçluluk düzeyinin ise yoksulluğu arttırıcı ve insani gelişmişlik düzeyini azaltıcı etkisi olduğu test edilmiştir. Genel olarak araştırma sonuçları, dış yardım düzeyinin yoksulluk üzerinde azaltıcı ve dış borçluluk düzeyinin ise yoksulluğu arttırıcı etkisi olduğunu göstermiştir.

References

  • Akram Naeem and Abdul Hamid (2016), “Public Debt, Income Inequality and Macroeconomic Policies: Evidence From South Asian Countries”, Pakistan Journal of Social Sciences, 36(1), p. 99-108.
  • Alkire Sabina and Gisela Robles (2016), (Global Multidimensional Poverty Index 2016), OPHI Oxford Poverty & Human Development Initiative, www.ophi.org.uk, 11.05.2017.
  • Alvi Eskander and Aberra Senbeta (2012), “Does Foreign Aid Reduce Poverty?”, Journal of International Development, 24, P. 955-976.
  • Arshad Zeshan, Muhammad Zaid and Adnan Latif (2014), “Relative Effectiveness of Foreign Debt and Foreign Aid on Economic Growth in Pakistan”, Interdisciplinary Journal of Contemporary Research in Busness, 6(1), p. 51-67.
  • Asra Abuzar, Estrada Gemma, Kim Yangseon and M.G Quibra (2005), “Poverty and Foreign Aid Evidence from Recent Cross-country Data”, ERD Working Paper: 65, Asian Development Bank.
  • Bahmani-Oskooee Mohsen and Haharouf Oyolola (2009), “Poverty Reduction and Aid: Cross- country Evidence”, International Journal of Social Policy, 29(5/6), p.264-273.
  • Boone Peter (1996), “Politics and The effectiveness of Foreign Aid”, European Economic Review, 40(2), p. 289–329.
  • Calderon Cecilia M., Alberto Chong and Mark Gradstein and (2006), “Foreign Aid, Income Inequality, and Poverty”, Inter-American Development Bank, Working Paper 547, p.1- 30.
  • Chong Alberto, Mark Gradstein and Cecilia M. Calderon (2009), “Can Foreign Aid Reduce Income Inequality and Poverty?”, Public Choice, 140, p. 59–84.
  • Ekpo Akpan H. and Elijah Udo (2015), “Public Debt,G and Poverty Reduction in a Failed State: Nigeria 1970-2011”, Journal of Business and Economics, 6(5), p. 944-957.
  • Feeny Simon (2003), “The Impact of Foreign Aid on Poverty and Human Well-being in Papua New Guinea”, Asia Pacific Development Journal, 10(2), p. 73-93.
  • Görgülü Mehmet Emre (2016), “Dış Yardımların Ekonomik Büyüme Üzerine Etkileri”, İnsan ve Toplum Bilimleri Araştırmaları Dergisi, 5(5), s. 1292-1322.
  • Herzer Dierk and Peter Nunnenkamp (2012), “The Effect of Foreign Aid on Income Inequality: Evidence from Panel Cointegration”, Kiel Working Paper, No: 1762.
  • Ijaiya Gafar T. and Muftau A. Ijaiya (2004), “Foreign Aid and Poverty Reduction in Sub- Saharan Africa: A Cross-country Investigation”, South African Journal of Economic and Management Sciences, 7(3), p. 542-552.
  • Kaya, Ersin (2009), Yoksullukla Mücadelede Avrupa’nın ve Türkiye’nin Sosyal Yardım Modeli, Yayınlanmış Sosyal Yardım Uzmanlık Tezi, TC Başbakanlık Sosyal Yardımlaşma ve Dayanışma Genel Müdürlüğü, Ankara.
  • Krugman Paul R. (1988), “Financing Versus Forgiving a Debt Overhang”, Journal of Development Economics, 29(3), p. 253-68.
  • Loko Boileau, Montfort Mlachila, Faj Nallari and Kadima Kalonji (2003), The Impact of External Indebtedness on Poverty in Low-income Countries”, IMF Working Paper, WP/03/61.
  • Masud Nadia and BorianaYontcheva (2005), “Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid”, IMF Working Paper, WP/05/100.
  • Mba Peter N., Meriel Alali Bell-Gam and Peter S. Ubi (2012), “Interplay of Foreign Aid, External Debt and Economic Growth: The Nigeria Experience”, International Journal of Economics and Finance, 4(8), p. 177-185.
  • Nguena Christian-Lambert (2014), “External Debt Origin, Capital Flight and Poverty Reduction in the Franc Zone: Does the Economic Consequences of Sino-African Relationship Matter?”, African Governance and Development Institute, AGDI Working Paper WP/16/04.
  • Oyedele Stephen Oloruntoba, Apollos Ajevata Emerah and Samson Ogege (2013), “External Debt, Debt Servicing and Poverty Reduction in Nigeria: An Empirical Analysis”, Journal of Economics and Sustainable Development, 4(19), p. 174-179.
  • Philip Olofin O. (2013), “Foreign Aid and Poverty Level in West African Countries: New Evidence Using a Heterogeneous Panel Analysis”, Australian Journal of Business and Management Research, 3(4), p.9-18.
  • Sachs Jeffrey D., John W. McArthur, Guido Schmidt-Traub, Margaret Kruk, Chandrika Bahadur, Michael Faye and Gordon McCord (2004), “Ending Africa’s Poverty Trap”, Brookings Papers on Economic Activity, 35(1), p. 117-240.
  • Saungweme Talknice and Shylet Mufandaedza (2013), “An Empirical Analysis of the Effects of External Debt on Poverty in Zimbabwe: 1980-2011”, International Journal of Economic Research, 4(6), p.20-27.
  • Senbeta Aberra (2009), “Three Essays on Foreign Aid, Poverty and Growth”, Dissertations Paper 723, Western Michigan University, http://scholarworks.wmich.edu/dissertations: 21.04.2017.
  • The World Bank (2017a), International Debt Statistics, https://openknowledge.worldbank.org/bitstream/handle/10986/25697/.pdf, 29.03.2017.
  • The World Bank (2017b), World Development Indicators, http://data.worldbank.org/datacatalog/world-development-indicators, 29.03.2017.
  • Ugwuegbe Sebastine Ugochukwu, I.G Okafor and Christian Azino Akarogbe (2016), “Effect of External Borrowing and Foreign Aid on Economic Growth in Nigeria”, International Journal of Academic Research in Business and Social Sciences, 6(4), p. 155-175.
  • Umaru Aminu, Ahmadu Aminu Hamidu and Salihu Musa (2013), “External Debt and Domestic Debt Impact on the Growth of the Nigerian Economy”, International Journal Educational Research, 1(2), p. 70-85.
  • UNDP (United Nations Development Programme) (2016a), Human Development Report 2016, http://hdr.undp.org/sites/default/files/2016_human_development_report.pdf, 30.03.2017.
  • UNDP (United Nations Development Programme) (2016b), Human Development Data (1990- 2015), http://hdr.undp.org/en/data, 30.03.2017.
  • Woldekidan Hana (2015), “The Role of Foreign Aid in Reducing Poverty: Time Series Evidence from Ethiopia”, Journal of Economics and International Finance, 7(3), p. 59-71.
  • Wooldridge, Jeffrey M. (2001), Econometric Analysis of Cross Section and Panal Data, The MIT https://jrvargas.files.wordpress.com/, 01.04.2017. Cambridge, Massachusetts London, England
  • Yanar, Rüstem ve Ahmet Şahbaz (2013), “Gelişmekte Olan Ülkelerde Küreselleşmenin Yoksulluk ve Gelir Eşitsizliği Üzerindeki Etkileri”, Eskişehir Osmangazi Üniversitesi İİBF Dergisi, 8(3), s. 55-74.
There are 34 citations in total.

Details

Primary Language Turkish
Journal Section Research Article
Authors

Fazlı Yıldız

Publication Date March 1, 2018
Published in Issue Year 2018 Volume: 4 Issue: 1

Cite

APA Yıldız, F. (2018). Gelişmekte Olan Ülkelerde Dış Borçlanma ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme. Uluslararası Ekonomik Araştırmalar Dergisi, 4(1), 9-19.
AMA Yıldız F. Gelişmekte Olan Ülkelerde Dış Borçlanma ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme. UEAD. March 2018;4(1):9-19.
Chicago Yıldız, Fazlı. “Gelişmekte Olan Ülkelerde Dış Borçlanma Ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme”. Uluslararası Ekonomik Araştırmalar Dergisi 4, no. 1 (March 2018): 9-19.
EndNote Yıldız F (March 1, 2018) Gelişmekte Olan Ülkelerde Dış Borçlanma ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme. Uluslararası Ekonomik Araştırmalar Dergisi 4 1 9–19.
IEEE F. Yıldız, “Gelişmekte Olan Ülkelerde Dış Borçlanma ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme”, UEAD, vol. 4, no. 1, pp. 9–19, 2018.
ISNAD Yıldız, Fazlı. “Gelişmekte Olan Ülkelerde Dış Borçlanma Ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme”. Uluslararası Ekonomik Araştırmalar Dergisi 4/1 (March 2018), 9-19.
JAMA Yıldız F. Gelişmekte Olan Ülkelerde Dış Borçlanma ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme. UEAD. 2018;4:9–19.
MLA Yıldız, Fazlı. “Gelişmekte Olan Ülkelerde Dış Borçlanma Ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme”. Uluslararası Ekonomik Araştırmalar Dergisi, vol. 4, no. 1, 2018, pp. 9-19.
Vancouver Yıldız F. Gelişmekte Olan Ülkelerde Dış Borçlanma ve Dış Yardımların Yoksulluk Üzerindeki Etkisi: Yatay Kesit Analizi İle Bir İnceleme. UEAD. 2018;4(1):9-19.