Does Aid Improve Governance in Developing Countries? Different Effects by Multi-Dimensional Governance
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This paper examines whether aid to developing countries has achievedthe policy goals of international development, which have tended to place considerableemphasis on the improvement of governance in developing countries.Previous studies have explored this issue by conceptualizing governance interms of one aspect or by conducting micro-level case studies. In contrast, inthis paper we try to analyze the effect of aid on governance by suggesting anew conceptual framework that defines governance as made up of three parts—political, administrative, and judicial sectors. Then we analyze the effects of aidon these three sectors at macro level using a panel analysis of 90 developingcountries over the 10-year period from 2002 to 2011. We found that aid helpedimprove political and administrative governance but not judicial governance.Based on our results, we suggest that strategies for governance improvementneed to focus on public administration, since this appears to be the sector that ismost amenable to reform. In addition, considering that judicial reform requires along-term outlook to accumulate social trust, we need to put more effort intogenuinely understanding the context of developing countries and into promotingreform based on their unique historical and cultural backgrounds as well as theirpolitical and socioeconomic circumstances.
Abstract
This paper examines whether aid to developing countries has achievedthe policy goals of international development, which have tended to place considerableemphasis on the improvement of governance in developing countries.Previous studies have explored this issue by conceptualizing governance interms of one aspect or by conducting micro-level case studies. In contrast, inthis paper we try to analyze the effect of aid on governance by suggesting anew conceptual framework that defines governance as made up of three parts—political, administrative, and judicial sectors. Then we analyze the effects of aidon these three sectors at macro level using a panel analysis of 90 developingcountries over the 10-year period from 2002 to 2011. We found that aid helpedimprove political and administrative governance but not judicial governance.Based on our results, we suggest that strategies for governance improvementneed to focus on public administration, since this appears to be the sector that ismost amenable to reform. In addition, considering that judicial reform requires along-term outlook to accumulate social trust, we need to put more effort intogenuinely understanding the context of developing countries and into promotingreform based on their unique historical and cultural backgrounds as well as theirpolitical and socioeconomic circumstances.
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