Article2020

Does state capacity matter for foreign aid effectiveness? Panel data evidence on water from 87 countries

4 citations0/0 files storedWater International

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International Development and Aid Water Resource Management and Quality Natural Resources and Economic Development

Abstract

This study attempts to measure how the effectiveness of aid to the drinking water sector is mediated by state capacity. I use panel data on a sample of 87 aid-receiving countries, with the Bureaucratic Quality Index as a measure of state capacity. Employing random effects, fixed effects, and system GMM techniques, the study empirically and robustly finds that state capacity does not have a significant positive mediating impact on aid effectiveness in increasing access to improved water sources. I also find that the mediating impact of state capacity is contingent on the level of democracy in aid-receiving countries.

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References

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