| dc.description.abstract | Foreign aid is often given to less developed countries to transfer resources with the
hope to bring benefits and improvements to the receiving society. However, various
forms of corruption often hinder aid effectiveness. This study visits the notion of
whether foreign aid causes corruption levels to escalate or decrease, using a random
effect panel regression model. For the purpose of this research, the world’s most
corrupt countries have been divided into two regions: Africa (21 countries) and Asia
(14 countries), and data from 1999 to 2016 is collected from World Bank and
Transparency International. Other control variables used for this study include GDP
per capita, income inequality, political stability, and trade openness. Evidence from
panel analysis suggests foreign aid leads to more corruption in both these regions, by
increasing the scope of rent seeking behavior. It is expected that results from this
research will provide assistance in formulating an effective policy framework to tackle
corruption in aid receiving economies. | en_US |
