Anaxagorou, Christiana (2017) Public finance, foreign aid and political incentives. PhD thesis, University of Sheffield.
Abstract
This thesis consists of three studies on foreign aid and its allocation by political leaders
within recipient countries. It explores whether this allocation depends on personal motives
and political purposes.
The first study focuses on the effect of aid on government spending using country-level
data, distinguishing between several types of foreign aid that are expected to impact
spending in different ways. The impact of institutional quality on aid fungibility is also
considered since receiving foreign aid could promote corrupt or illegal activities on behalf
of the recipient government by diverting aid into private pockets. The results suggest that
aid fungibility depends on institutional quality, especially for off-budget aid.
The second study focuses on the effect of aid on tax revenues using country-level data,
distinguishing between two types of finance to investigate whether or not aid pays for tax
reductions. The results show that aggregate aid, aid in the form of grants or in the form
of loans leaves tax revenues unaffected at all levels of institutional quality. These results
suggest that aid is not fungible in the context of tax revenues and that aid does not finance
tax reductions.
The third study focuses on the sub-national allocation of foreign aid flows from China and
the World Bank using district-level data. This allocation of aid across regions is up to the
discretion of the political leader. This study attempts to identify the strategy leaders use to
maximise their vote share, or whether or not leaders favour co-ethnic regions. The results
show that in competitive electoral environments, leaders divert aid away from their core
voters and towards supporters of the opposition. In contrast, in non-competitive electoral
environments without strong political motivations leaders favour their co-ethnic regions.
Metadata
Supervisors: | Tsuchiya, A |
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Keywords: | Foreign aid, fungibility, developing countries, geo-referenced data, ethnic favouritism, aid allocation, electoral stategies |
Awarding institution: | University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Economics (Sheffield) |
Identification Number/EthosID: | uk.bl.ethos.739867 |
Depositing User: | Ms Christiana Anaxagorou |
Date Deposited: | 30 Apr 2018 10:41 |
Last Modified: | 12 Oct 2018 09:53 |
Open Archives Initiative ID (OAI ID): | oai:etheses.whiterose.ac.uk:20187 |
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PhD Thesis
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Description: PhD Thesis
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