Suchergebnisse

The thesis examines the impacts of external assistance on the economic performance of the country for the period 1960/61 –1999/00. The analysis makes use of the Johansen maximum likelihood estimation procedure estimating five equations to identify the independent effect of foreign assistance on investment and/or growth, saving, government tax revenue, government tax expenditure and real exchange rate. Accordingly, it is found that external assistance negatively affected the investment rate and hence the growth rate of the economy. The paper further investigates these unexpected negative relationships between foreign inflows and economic growth. The insignificant effect of external grant on domestic saving, negative impact of external grant on government consumption and the 'Dutch Disease' effect of both foreign grant and loan is responsible for the negative impact of foreign assistance on economic growth of the economy.