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Article: Foreign aid and the potential effects on income inequality in recipient nations.
- Article from:
- Journal of International Business Research
- Article date:
- July 1, 2005
- Author:
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ABSTRACT
Foreign aid can be effective in promoting economic growth and reducing poverty but there are also cases where aid has been wasted by the recipient nation. This study examines the effectiveness of foreign aid on income inequality, as measured by the GINI coefficient. Several studies have documented that foreign aid has a positive effect on economic growth, but few studies have focused on the impact that aid has on income inequality. While economic growth should benefit the economy as a whole, economic growth does not imply that income inequality will improve. Using data for twenty-nine countries and controlling for a variety of factors, the results of the ...