Can the Current Aid to Latin America Contribute to Economic Growth and Poverty Alleviation?
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This paper analyzes whether the foreign aid recently provided for Latin America and the Caribbean (LAC) is efficiently distributed or not. Despite the substantial progress attained in LAC, economic growth and poverty reduction in countries of this region lag behind countries in other regions, especially East Asia. Moreover, recent studies indicate that when donor countries allocate aid, they increasingly select countries which can use aid effectively for economic growth and poverty reduction. For this reason, we suspect that foreign aid for LAC has been less effective in promoting growth and reducing poverty mainly because it was allocated to countries in LAC inefficiently For this study, we consider both recipient countries’ development needs and donor countries’ economic interests in allocating foreign aid at the same time. We analyzed relevant data from 22 Development Assistance Committee (DAC) member countries and 32 LAC countries during 2005-2009. In addition, we also considered Korea’s distribution of foreign aid for comparison with aid allocations by other DAC member countries. The results show that foreign aid allocations by Korea and other DAC member states for countries in LAC should be improved substantially so that countries in LAC can use the foreign aid effectively for economic growth and poverty reduction.
Abstract
This paper analyzes whether the foreign aid recently provided for Latin America and the Caribbean (LAC) is efficiently distributed or not. Despite the substantial progress attained in LAC, economic growth and poverty reduction in countries of this region lag behind countries in other regions, especially East Asia. Moreover, recent studies indicate that when donor countries allocate aid, they increasingly select countries which can use aid effectively for economic growth and poverty reduction. For this reason, we suspect that foreign aid for LAC has been less effective in promoting growth and reducing poverty mainly because it was allocated to countries in LAC inefficiently For this study, we consider both recipient countries’ development needs and donor countries’ economic interests in allocating foreign aid at the same time. We analyzed relevant data from 22 Development Assistance Committee (DAC) member countries and 32 LAC countries during 2005-2009. In addition, we also considered Korea’s distribution of foreign aid for comparison with aid allocations by other DAC member countries. The results show that foreign aid allocations by Korea and other DAC member states for countries in LAC should be improved substantially so that countries in LAC can use the foreign aid effectively for economic growth and poverty reduction.
참고문헌 (22)
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