Sector Specific Aid Flow, Official Development Assistance and Income Disparity: An Analysis from Selected Asian Countries

Durdana Qaiser Gillani · Zakir Ullah Niazi · Javed Iqbal · Parveen Akhter

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International Development and Aid Income, Poverty, and Inequality Economic Growth and Development

Abstract

Over the decades, there has been much-observed income disparity in poor and developing countries. For this, donor countries provide aid for disbursement in some specific sectors to alleviate poverty and disparity. Considering the severe issue of income disparity in Asian economies, this research has focused on the role of sector-specific and foreign aid in lessening income disparity in these economies. We have used panel data from 10 selected Asian countries and found that aid for the education and health sectors. This research has utilized the data drawn from 10 selected Asian economies such as Bangladesh, India, Indonesia, Malaysia, Sri Lanka, Pakistan, Philippines, Iran, Jordan and China. The data has been considered from 2003 to 2018 due to data deficiency of important variables. The data has been taken from World Bank Development Indicators. The Gini coefficient income inequality) was considered a dependent variable. Education aid commitments (total number of commitments for education from donor countries), health aid commitments (total number of commitments for aid for the health sector from donor countries), official development assistance ($US million) and total population have been used as independent variables. The study used the fixed effect method to indicate an association of dependent and independent variables. Results of the study revealed that official development assistance has played a key role in lessening income disparity in these economies. Findings suggest its transparent allocation to both sectors for high growth, attracting more aid from the donor countries. There is a serious need for a stable political environment. Finally, measures should be taken to control the population in these countries.

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References

2003Can Foreign Aid Buy Growth?2009Unequal we stand: An empirical analysis of economic inequality in the United States, 1967–2006 2008The end of poverty: economic possibilities for our time 1999Aid, Policies, and Growth 2001Globalization, Growth, and Poverty: Building an Inclusive World Economy 1987Aid, the Public Sector and the Market in Less Developed Countries 2005The End of Poverty: Economic Possibilities for Our Time 2014Capital in the twenty-first century

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