Assessment of the interdependence between external assistance and economic growth of developing countries

Kozhukhova, Tetiana and Кожухова, Тетяна Валеріївна and Кожухова, Татьяна Валерьевна and Neverov, S. L. and Неверов, С. Л. and Неверов, С. Л. (2016) Assessment of the interdependence between external assistance and economic growth of developing countries. Вісник Донецького університету економіки і торгівлі імені Михайла Туган-Барановського (1(65)). pp. 37-45. ISSN 2079-4819

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Abstract

The results of a correlation and regression analysis of the interdependence between external assistance and the economic growth of developing countries (grouped by income, in particular, the least developed countries (according to the UN classification), countries with income below average and above average (According to the World Bank classification) for the period of 1996–2015), allow to make conclusions about the absence of direct impact of official development assistance on the gross domestic product of developing countries. The lack of direct impact of external assistance to the developing countries’ economic growth exists because of the lack of funding due to the failure of developed countries to make official development assistance at a benchmark of 0.7 % GNI, low efficiency of fiscal, monetary and trade policies in recipient countries, the emergence in some countries of extraordinary circumstances related to socio-political tension, the instability of funding by international organizations. It is determined that despite the results of the correlation and regression analysis, the achievement of the goals of sustainable development in developing countries requires not only an increase of the volume of external assistance, but also an increase of its effectiveness.

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