Journal articles on the topic 'Foreign financial aid'
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Agapova, Anna, and Sharmila Vishwasrao. "Financial sector foreign aid and financial intermediation." International Review of Financial Analysis 72 (November 2020): 101589. http://dx.doi.org/10.1016/j.irfa.2020.101589.
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Samoff, Joel. "The intellectual/financial complex of foreign aid." Review of African Political Economy 19, no. 53 (March 1992): 60–75. http://dx.doi.org/10.1080/03056249208703939.
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Tsaurai, Kunofiwa. "Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets." Comparative Economic Research. Central and Eastern Europe 21, no. 4 (December 10, 2018): 45–61. http://dx.doi.org/10.2478/cer-2018-0026.
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This paper studied whether the complementarity between financial development and foreign aid promotes economic growth in selected emerging markets using the panel Fully Modified Ordinary Least Squares (FMOLS) approach, with data ranging from 1994 to 2014. Although (1) aid‑growth and (2) finance‑growth studies have been conclusively dealt with, the role of financial development in the aid‑growth nexus has been hardly researched. Is financial development a channel through which foreign aid positively influences economic growth? The current study seeks to address these issues using selected emerging markets as a case study. The complementarity between foreign aid and financial development (domestic credit provided by the financial sector, domestic private credit provided by banks, outstanding domestic private debt securities and stock market turnover) resulted in a significant positive impact on economic growth. The study, therefore, urges selected emerging markets to implement policies which deepen the financial sector in order to allow foreign aid to positively contribute towards economic growth.
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Janjua, Laeeq Razzak. "Financial Flows and Environmental Degradation." International Journal of Circular Economy and Waste Management 1, no. 2 (July 2021): 1–15. http://dx.doi.org/10.4018/ijcewm.2021070101.
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Foreign financial inflow always acts as a sort of catalyst agent for economic growth; moreover, in the recent period, the effect of these financial flows on sustainable development is a debatable topic among researchers. The central idea of conducting this analysis is to empirically explore the effect of foreign financial inflows, which are foreign direct investment (FDI), remittances (REM), and development aid (ODA), on-air pollution of Algeria using the data covers from 1970 to 2018. Instead of the conventional co-integration approach, the ARDL (auto regressive distributed lagged) estimation method is adopted for analysis. The bound test is applied for investigating the co-integration analysis. Results indicate that foreign direct investment, development aid, and energy use assert long-run positive and significant effects on air pollution, whereas remittances indicate a long-run significant but adverse impact on air pollution. In short-run foreign direct investment, ODA and GDP per capita indicate a conclusive and significant impact on air pollution. Furthermore, in short-run, energy utilization indicates a significant adverse effect on air pollution.
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Kébré, W. Jean Marie. "Does Foreign Aid Promote Financial Development in the Economic Community of West African States (ECOWAS)?" Research in Economics and Management 5, no. 2 (May 21, 2020): p39. http://dx.doi.org/10.22158/rem.v5n2p39.
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This article analyzes relationship between foreign aid and financial development in ECOWAS countries. These countries receive aid flows from developed countries and from international financial institutions. The article’s idea is to evaluate this aid effects on financial development and to assess role of governance on this relationship. The analysis uses panel data from ECOWAS countries over the period 1984-2016. The estimations’ results, based on Dynamic ordinary least squares (DOLS) estimator, show that aid is negatively and significantly linked with financial development indicators used. These results suggest that aid is an obstacle to financial development. Governance role tests do not change the negative effect of aid on financial development. However, the magnitude of the negative effect of interactive variables (with governance variables) is less than aid direct effect on financial development. These results suggest that an additional effort to improve governance in these countries would reduce aid negative effect on financial development, or even reverse this effect.
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Ho, Sin-Yu, and Bernard Njindan Iyke. "The Determinants of Economic Growth in Ghana: New Empirical Evidence." Global Business Review 21, no. 3 (July 2, 2018): 626–44. http://dx.doi.org/10.1177/0972150918779282.
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This article deals with an investigation into the determinants of economic growth in Ghana over the period from 1975 to 2014. In particular, we investigated the impact of physical capital, human capital, labour, government expenditure, inflation, foreign aid, foreign direct investment, financial development, globalization and debt servicing on economic performance within an augmented Solow growth model. It was found that, in the long run, both human capital and foreign aid have a positive influence on output, while labour, financial development and debt servicing have a negative impact on output. It was also found that, in the short run, government expenditure and foreign aid have a positive influence on economic growth, while labour, inflation and financial development have a negative impact on economic growth. These findings hold important policy implications for the country.
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DUTTA, NABAMITA, and CLAUDIA R. WILLIAMSON. "Can foreign aid free the press?" Journal of Institutional Economics 12, no. 3 (February 2, 2016): 603–21. http://dx.doi.org/10.1017/s1744137415000557.
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AbstractCan foreign aid help free the press? Aid may boost press freedom by incentivizing government to reduce media regulations and provide financial support for infrastructure. Alternatively, foreign aid may prevent press freedom by expanding the role of the state and promoting government over private enterprises. We contend that the magnitude of foreign aid's influence is conditional on the existence of democratic checks. Using panel data from 1994 to 2010, we find evidence suggesting that aid significantly increases press freedom in democracies but insignificantly relates to press freedom in autocracies. Collectively, the results suggest that a standard deviation increase in aid to a country at the mean level of democracy increases press freedom by approximately a 1/20th standard deviation. Overall, the findings suggest that donors should be cautious as most aid recipients are not democratic and aid leads to only relatively small marginal improvements in press freedom.
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Ang, James B. "Does Foreign Aid Promote Growth? Exploring the Role of Financial Liberalization." Review of Development Economics 14, no. 2 (May 2010): 197–212. http://dx.doi.org/10.1111/j.1467-9361.2010.00547.x.
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Tiwari, Aviral Kumar. "Foreign Aid, FDI, Economic Freedom and Economic Growth in Asian Countries." Global Economy Journal 11, no. 3 (September 2011): 1850231. http://dx.doi.org/10.2202/1524-5861.1705.
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This study examines the effectiveness of foreign aid, foreign direct investment, and economic freedom for selected 28 Asian countries in a panel framework. The model includes foreign aid, foreign direct investment, economic freedom, labor force, and capital stock. The estimation procedure was carried out on pooled annual time series data for the period 1998-2007. For the purpose of analysis, we used static and dynamic panel data techniques. The results indicated that an increase in the fiscal freedom, financial freedom and domestic capital stock were significant factors positively affecting economic growth. Freedom from corruption, inflow of foreign direct investment and foreign aid were significant factors negatively affecting economic growth. Further, we found that life expectancy played a significant and positive role in economic growth. Foreign aid had a non-linear impact (negative impact of high aid flows) upon economic growth.
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Philip, Olofin Olabode. "Foreign Aid and Poverty level in West African Countries: New evidence using a heterogeneous panel analysis." Australian Journal of Business and Management Research 03, no. 04 (April 9, 2013): 09–18. http://dx.doi.org/10.52283/nswrca.ajbmr.20130304a02.
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This paper re-examines the effects of different types of foreign aid on poverty level in 8 West African countries between 1975 and 2010 by employing both the first and second generation econometrics methods of panel unit root test, cointegration test and empirical estimators with heterogeneous slopes. Our results suggest that total foreign aid and food aid impact positively on poverty, while technical aid reduces poverty. Apart from total foreign aid, none of the results was statistically significant. The results show negative relationship among poverty, life expectancy, foreign direct investment, per capita GDP and financial depth, but they were not statistically significant. This suggests that their impacts on poverty in West Africa were minimal.
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Ijjo, Alex Thomas, and Isaac M. B. Shinyekwa. "Foreign Aid and Trade Capacity Development Recent Evidence from Uganda." Journal of Sustainable Development 9, no. 3 (May 30, 2016): 39. http://dx.doi.org/10.5539/jsd.v9n3p39.
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Endemic supply side constraints including fluctuating output levels, deficient trade infrastructure, rampant non-tariff barriers and incapacity to ensure international quality standards continue to thwart the gainful participation of many Least Developed Countries (LDCs) in an increasingly liberal global trade environment. At its 2005 Hong Kong Ministerial Conference, the World Trade Organization launched its Aid for Trade (AFT) initiative aimed at coordinating global financial support for strengthening trade capacity in Least Developed Countries (LDCs). This paper examined the effect of foreign aid, particularly Official Development Assistance, on Uganda’s external trade and its AFT component in strengthening the country’s trade capacity. Using time series Error Correction Modelling and the World Bank’s World Development Indicators and official national statistics, the paper finds small but positive aid influence on Uganda’s exports and imports and generally close alignment between aid and national priorities. However, given general aid volatility but more especially following the anti-homosexuality legislation and gross corruption allegations in the case of Uganda, the paper advises that external aid be treated as a supplement rather than a substitute for domestic financial resource mobilization in trade capacity development.
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Lubaina Dawood, Khadija Karim, Gul Nagina, and Niamatullah. "Idealist, Realist or Neo-Realist Financial Aid Donors to Pakistan." Technium Social Sciences Journal 10 (July 13, 2020): 1–12. http://dx.doi.org/10.47577/tssj.v10i1.1123.
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Foreign aid has always been an important source of finance for Pakistan. The flow of foreign aid depends upon the donor’s interest and motives that can differ as some may be truly interested in helping the recipient nation (Mumtaz, 2013). Some donors may have a national interest while others may want to enhance their economic relations which refer to the idealist, realist, and neo-realist theories of motivations respectively (Berthelemy, 2005). The present inquiry is informed by a qualitative interpretive approach based on semi-structured interviews regarding financial aid donor’s motives. The overall results revealed people's perception that America has an inclination for both Pakistan’s nation and region for its own benefits whereas the United Kingdom is interested in human resources. Saudi Arab and China have dual motives, one is the development of Pakistan and the other is security and trade interest respectively. So America is proclaimed as realist donors, United Kingdom as Neo-realist while Saudi Arab and China have mixed motivations. Both are Idealists with some realist and neo-realist motivation correspondingly. However other financial aid donors are not prominent amongst the Pakistani nations.
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Mangwanya, Maonei. "Evaluating the impacts of foreign aid on low-income countries in Sub-Saharan Africa." International Journal of Research in Business and Social Science (2147- 4478) 11, no. 6 (September 12, 2022): 370–77. http://dx.doi.org/10.20525/ijrbs.v11i6.1925.
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Foreign aid comprises of a provision of financial resources or commodities such as food parcels or technical advice and training. The most prevalent type of foreign aid, particularly in developing countries, is Official Development Assistance (ODA) that strives to promote development and combat poverty. In Sub-Saharan Africa, there is a significant dependency on foreign aid which prompts the question; Is foreign aid completely necessary in developing African countries? With a high reliance on foreign aid the focus tends to shift from developing into self-sufficient economies and combating poverty to being dependent states. The paper explores the impact of foreign aid on the development in Sub-Saharan Africa. Because low-income countries are significantly reliant on aid, the study took a qualitative approach using the case study method featuring case studies from Kenya, Togo, and Zimbabwe. From the literature of the study, it is evident that the three countries had become dependent on foreign Aid. Conclusions drawn from the study show that foreign has become a recipe for dependency syndrome. Based on the findings from the literature, there is a need for private investments.
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Werker, Eric, Faisal Z. Ahmed, and Charles Cohen. "How Is Foreign Aid Spent? Evidence from a Natural Experiment." American Economic Journal: Macroeconomics 1, no. 2 (June 1, 2009): 225–44. http://dx.doi.org/10.1257/mac.1.2.225.
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We use oil price fluctuations to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run effect on aggregate demand, national accounts, and balance of payments. Aid affects most components of GDP though it has no statistically identifiable impact on prices or economic growth. Much aid is consumed, primarily in the form of imported noncapital goods. Aid substitutes for domestic savings, has no effect on the financial account, and leads to unaccounted capital flight. (JEL F35, O19)
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Ijaiya, GT, and MA Ijaiya. "Foreign aid and poverty reduction in sub-Saharan Africa: A cross-country investigation." South African Journal of Economic and Management Sciences 7, no. 3 (April 8, 2004): 542–52. http://dx.doi.org/10.4102/sajems.v7i3.1364.
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The continuous increase in the rate of poverty in Sub-Saharan Africa can be linked to the inadequate management and use of international financial assistance such as foreign aid. Using a cross-country data, this paper examines the relationship between foreign aid and poverty reduction in Sub-Saharan Africa (SSA). The result obtained indicates that foreign aid has no significant influence on poverty reduction in SSA, because of the countries’ weak economic management evidenced by high levels of corruption, bad governance, and political and economic instability. To improve the performance of foreign aid directed at poverty reduction, the paper suggests the implementation of measures directed at good governance, macroeconomic and political stability.Incentives in Nigeria’s food manufacturing industries and their impact on output and prices
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Selcuk, Alif Akben. "Volatility and business cycle properties of foreign financial aid into developing countries." Pressacademia 5, no. 1 (March 30, 2016): 1. http://dx.doi.org/10.17261/pressacademia.2016116549.
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Isaksson, Anders. "Financial liberalisation, foreign aid, and capital mobility: evidence from 90 developing countries." Journal of International Financial Markets, Institutions and Money 11, no. 3-4 (September 2001): 309–38. http://dx.doi.org/10.1016/s1042-4431(01)00042-7.
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Gazibo, Mamoudou. "Foreign Aid and Democratization: Benin and Niger Compared." African Studies Review 48, no. 3 (December 2005): 67–87. http://dx.doi.org/10.1353/arw.2006.0015.
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Abstract:This article compares the democratization process in Benin and Niger in the decade from 1989 to 1999 and emphasizes the influence of external donors with regard to their economic support of democratization. The task is twofold. First, I try to understand why, though these two aid-dependent countries share many initial similarities, the former received more external financial assistance than the latter. I build upon New Institutionalist concepts such as timing, sequence, and path dependency to demonstrate that the probability and continuity of foreign aid depend both on the timing and on sequences of the transition—a combination that may or may not produce a path-dependent phenomenon with regard to the donors. Second, I argue that the capacity of foreign aid to foster democratization depends largely on its timing, particularly in critical moments of the democratic process.
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Galistcheva, N. V. "Foreign Aid as a Factor of Development of Economy of the Developing State: The Experience of Pakistan." MGIMO Review of International Relations 65, no. 2 (May 25, 2019): 136–58. http://dx.doi.org/10.24833/2071-8160-2019-2-65-136-158.
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The aim of this study is to analyze the use of foreign aid for stimulating economic development using the case of Pakistan and to find out advantages and disadvantages of raising national financial resources through foreign aid. The article analyzes the evolution of the policy of attracting financial resources through this channel, as well as the main Pakistani donors and their conditions.The author uses the most representative theories which consider the consequences of attracting foreign assistance to the national economy making the theoretical basis of the study a synthesis of the concept of aid as the most important factor to stimulate development and M.A. Rahman’s approach to determining an impact of foreign aid inflows on economic growth. The article emphasizes that foreign aid has always been very significant in stimulating the development of the Pakistani economy due to the serious limitation of the volume of national capital since its independence. The author considers the effectiveness of assistance provided to Pakistan during the import substitution period of its economic policy. The construction of large objects of heavy industries and infrastructure in various regions of the country was financed from external resources.The article also analyzes the current volume, conditions and forms of foreign assistance provided to Pakistan. The author considers the main donors of the Pakistani economy in the 1990s and 2010s and reveals the tendency of shifting the terms of aid’s allocation from grants to concessional loans, which inevitably leads to an increase in the volume of the country's external debt.
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Adebanji, Funmilola Bukola, Philip Ifeakachukwu Nwosa, Olusoji Ojo, and Olamide Jacquilyne Alake. "Foreign Aid and Child Mortality Rate in Nigeria." Signifikan: Jurnal Ilmu Ekonomi 9, no. 2 (August 14, 2020): 187–94. http://dx.doi.org/10.15408/sjie.v9i2.14960.
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Several factors have attributed to the high child mortality rate, including poverty, age of women at birth, and length of the interval between births. Besides, the lack of financial resources in developing countries has been a challenge in addressing the prevalent high child mortality rate. Thus, this study seeks to examine the relationship between foreign aid and infant mortality in Nigeria from 1981 to 2018. Employing Auto-Regressive Distributed Lag (ARDL) technique, the study observed that foreign aid, government expenditure on health, real GDP, and carbon dioxide emission negatively impacted child mortality. Hence, the study concludes that foreign aid reduces child mortality in Nigeria. The study recommends that the government ensure that all foreign aid and grants use immediately to reduce child mortality by building the necessary infrastructure and making it readily available.JEL Classification: F35, I19.How to Cite:Adebanji, F. B., Nwosa, P. I., Ojo, O. O., & Alake, O. J. (2020). Foreign Aid and Child Mortality Rate in Nigeria. Signifikan: Jurnal Ilmu Ekonomi, 9(2), 187-194. https://doi.org/10.15408/sjie.v9i2.14960.
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Odhiambo, Nicholas M. "The Role Of Interest Rate Reforms In Lesotho: An Empirical Investigation." Journal of Applied Business Research (JABR) 27, no. 4 (June 20, 2011): 69. http://dx.doi.org/10.19030/jabr.v27i4.4657.
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<span>This paper examines the efficacy of interest rate reforms in Lesotho during the period 1972-2009. The study attempts to answer one critical question: Does interest rate liberalisation positively or negatively affect financial deepening in Lesotho? The study examines this linkage by regressing the financial depth variable on real income, deposit rate, foreign aid, the expected inflation and the lagged value of financial depth. Using the ARDL-Bounds testing approach, the study finds that there is a positive relationship between interest rate reforms and financial deepening in Lesotho, meaning that interest rate reforms lead to financial deepening in Lesotho. The results apply regardless of whether the financial deepening model is estimated in the short run or in the long run. Other results indicate that: i) An increase in real GDP has a positive effect on financial deepening in Lesotho - both in the short run and in the long run; ii) expected inflation has a positive effect on financial deepening in the short run; and iii) foreign aid has a negative effect on financial deepening in Lesotho in the short run.</span>
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Muiru, Monica Wanjiru, Sifunjo E. Kisaka, and Fredrick Kalui. "Effect of Foreign Exchange Risk Hedging Techniques on Financial Performance of Listed Firms in Kenya." International Journal of Accounting and Financial Reporting 8, no. 3 (July 24, 2018): 156. http://dx.doi.org/10.5296/ijafr.v8i3.13512.
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The adoption of floating foreign exchange rate regime in the 1990s and international trade have led to increased exposure of Kenyan firms to foreign exchange risk. Foreign exchange risk can affect a firm’s expected cash flows, and by extension, its financial performance. This paper examines the effects of foreign exchange risk hedging techniques on the financial performance of publicly listed firms in Kenya. The target population constituted all the 54 firms that were continuously listed on the Nairobi Securities Exchange during the study period, from 2011 to 2016. The study used panel data research design. Secondary data was obtained from financial statements of the listed firms. The data was coded and analysed using descriptive and inferential statistics—correlation and regression—with the aid of STATA software. The feasible generalised least square model was used to test the hypotheses. The results show currency hedging has a positive effect on financial performance. This implies that when hedging strategies and hedging tools are implemented appropriately, they help firms achieve their financial objectives, increasing financial performance, hence creating value for shareholders.
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Salem, Saber. "Chinese Foreign Aid to Fiji: Threat or Opportunity." China Report 56, no. 2 (April 29, 2020): 242–58. http://dx.doi.org/10.1177/0009445520916875.
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China’s political, economic and cultural influence is steadily rising in Fiji and the Pacific region as a whole. The Sino–Fiji cooperation deepened at multiple levels after the Fijian military assumed power through a coup d’état and removed the civilian government from power in late 2006. This ‘undemocratic behaviour’ infuriated the two regional powers—Australia and New Zealand who then applied sanctions on Fiji, particularly the military brass, and encouraged their counterparts as well as multilateral aid organisations to ‘punish’ Fiji’s military ‘regime’. The military government in order to derail the impact of sanctions from its traditional donors adopted the ‘Look North Policy’, which was opening cooperation with China and attracting Chinese investment in Fiji. China welcomed the friendship gesture and furnished Fiji with financial assistance. This Chinese friendship was also due to Taiwanese involvement in the region, which was providing aid for diplomatic recognition and support at the UN. The ‘microstates’ hold about 7 per cent of UN votes. Both China and Taiwan need their votes at multilateral organisations and given that these microstates are mostly aid-dependent economies, initiated an era of Chequebook diplomacy, which is basically money for diplomatic recognition in the case of Taiwan or acceptance of One China Policy in the case of China. The microstates have time and again switched between China and Taiwan and played one against the other to get more aid money out of their diplomatic rivalry. The Sino–Taiwan aid competition in the Pacific forced US to make a strong comeback and ensure that China under the pretext of denying Taiwan space in the region actually spies on the US activities in the region. As a result, the US and its regional allies have significantly increased their foreign aid to the island nations in order to coax them to diminish their level of financial dependence on China. So far, they have not been successful enough and China’s aid package has gone far beyond the level US is giving. Today, China is the second largest donor to the region and largest financier to Fiji. Fiji has become the ace in this game as it is the regional hub of the Pacific Island states. Bearing the current high level of aid competition between traditional and emerging donors in mind, it is too early to judge whether Chinese aid will cause more harm to Fiji than benefit or vice versa. It also entirely depends on the Fijian government as to how much it relies on Chinese aid and how clean Chinese are with their soft loans. China has been blamed for not being clear and specific about the terms and conditions of its concessional loans. This vagueness and secrecy that is associated with Chinese aid been a cause for concern, especially among traditional donors.
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Chen, Hong, and Tiru Jayaraman. "Role of Financial Sector in the Remittances-Growth Nexus in Fiji." Remittances Review 1, no. 1 (September 4, 2016): 17–36. http://dx.doi.org/10.33182/rr.v1i1.441.
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Amongst the three kinds of non-debt creating capital transfers, welcomed by capital-short Pacific island countries (PICs) for supplementing their limited domestic savings, remittances presently top the list, the other two being foreign aid and foreign direct investment. Remittances help poor families, reducing poverty. In the long run, however, the contribution of remittances to growth in output and economic development is contingent upon financial sector development (FSD). PICs are now fostering financial sector development by promoting greater financial inclusion. This paper seeks to assess the role of FSD in the nexus between remittances and output by undertaking an empirical study of Fiji.
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Ahmed, Imtiaz, Sahabuddin Ahmed Seikdear, and Ratna Khatun. "Effect of Capital Inflows on Financial Development: The Case of Bangladesh." ABC Research Alert 10, no. 3 (September 24, 2022): 09–22. http://dx.doi.org/10.18034/abcra.v10i3.626.
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This study examines the effect of capital inflow components' on Bangladesh's financial development. The analysis applied the Autoregressive Distributive Lag (ARDL) model to reveal short-run and long-run associations by utilizing monthly data from January 2011 to December 2021. The study appoints two proxy variables: bank credit to GDP and bank deposit to GDP to address financial development. Findings of the analysis demonstrated that FDI and remittance inflow don't exhibit a significant relationship with financial development in the long run. However, foreign aid established a nexus with the financial progress of Bangladesh. The study recommends enacting policies to keep capital inflows under Bangladesh's financial system by repatriating foreign investors' profits and lessening remittance costs by facilitating and modernizing remittance management.
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Lassoued, Mongi. "MICROFINANCE, FINANCIAL DEVELOPMENT, FOREIGN AID, AND INCOME INEQUALITY: EVIDENCE FROM SUB-SAHARAN AFRICA." International Journal of Economics and Financial Issues 11, no. 3 (May 10, 2021): 35–44. http://dx.doi.org/10.32479/ijefi.11277.
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Aluko, Olufemi Adewale. "The foreign aid–foreign direct investment relationship in Africa: The mediating role of institutional quality and financial development." Economic Affairs 40, no. 1 (February 2020): 77–84. http://dx.doi.org/10.1111/ecaf.12386.
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Younsi, Moheddine, Hasna Khemili, and Marwa Bechtini. "Does foreign aid help alleviate income inequality? New evidence from African countries." International Journal of Social Economics 46, no. 4 (April 8, 2019): 549–61. http://dx.doi.org/10.1108/ijse-06-2018-0319.
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Purpose The purpose of this paper is to examine the relationship between foreign aid and income inequality (IIQ) reduction for 16 African countries using unbalanced panel data covering the period 1990–2011. This paper attempts to answer the critical question: does foreign aid lead to IIQ reduction? Design/methodology/approach To examine the effect of foreign aid on IIQ, this paper uses an RE model with robust OLS regression and system-GMM estimator, which are useful in dealing with the endogeneity problems. Findings Results of RE model indicate that foreign aid, foreign direct investment, trade openness as well as corruption have a positive and statistically significant effect on IIQ. Government spending and inflation have a negative and statistically significant effect on IIQ, while GDP per capita growth has a negative but statistically insignificant relationship with IIQ. The results are robust by using system-GMM dynamic panel model which confirms that the coefficients of all considered variables remain same sign and significance. Research limitations/implications This study implies that an increase in foreign aid is associated with an increase in IIQ. As an effective strategy to foreign aid, this paper suggests that improving of financial sector development, and institutional quality and policies can reduce income inequalities and stimulate economic growth. Originality/value This paper is the first of its kind to empirically explore the relationship between IIQ and foreign aid measured here by net aid transfers as a share of GDP in African countries, using modern econometric techniques, time period and a variety of control variables.
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Sowa, Nii K., and Ivy K. Acquaye. "Financial and foreign exchange markets liberalization in Ghana." Journal of International Development 11, no. 3 (May 1999): 385–409. http://dx.doi.org/10.1002/(sici)1099-1328(199905/06)11:3<385::aid-jid590>3.0.co;2-p.
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Agiannidou, Christiana, and Ruska Bozhkova. "INTERCULTURAL EDUCATION AMIDST FINANCIAL CRISIS IN GREECE." Economics & Law 3, no. 1 (May 30, 2021): 1–17. http://dx.doi.org/10.37708/el.swu.v3i1.1.
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The present work is a contribution to the term of Inter-cultural education that presents enormous interest worldwide and more in the countries of Southern Europe. One of these countries that face intensely the migrant problem, is Greece. The number of refugees’ children who finish up a school level in Greece, and in the same time they try to survive is extremely high. For this reason, the aid of supported structures of education for foreign students in Greece, is needed. However, the importance of the intercultural education in Greece with the simultaneous reduction of funds on Greek education, caused a lot of discussions. As an outcome it is aimed to observe the opinions and the attitudes of teachers that are involved in the intercultural educational process in Greece. A parallel research will be carried out also the in public elementary schools of Chios island, that entertain foreign students. Finally, from the results of this research, would try to infer safe conclusions from specific assumptions.
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Ali, Sajid, and Raima Nazar. "Impact of Foreign Capital Inflows and Money Supply on Exchange Rate: A Case Study of Pakistan." Review of Economics and Development Studies 3, no. 1 (June 30, 2017): 83–90. http://dx.doi.org/10.26710/reads.v3i1.167.
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The study attempts to examine the impact of foreign capital inflows and money supply on exchange rate of Pakistan. For this purpose we have undertaken time series data for the period of 1973-2016. Annual data for the period 1973-2016 is used, taken from Economic Survey of Pakistan (various issues) and International Financial Statistics (IFS). The main variables used in our analysis are exchange rate, openness, workers' remittances, foreign direct investment, foreign aid and money supply. Simple Linear Regression model with ordinary least method (OLS) is used to analyse the results. Money supply is positively and significantly related to exchange rate. Worker's remittances (WREM), foreign aid (FAID), foreign direct investment. (FDI) and openness (OPP) are negatively and significantly related to exchange rate. The study shows that foreign capital inflows and workers' remittances significantly appreciate the exchange rate in the case of Pakistan.
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Neminebor, James, and Suleiman Aruwa. "FINANCIAL REPORTING STANDARDS ADOPTION AND FOREIGN DIRECT INVESTMENT IN NIGERIA AS MODERATED BY INSTITUTIONAL QUALITY." Caleb International Journal of Development Studies 4, no. 2 (December 14, 2021): 66–92. http://dx.doi.org/10.26772/cijds-2021-04-02-04.
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The adoption of IFRS enhanced the transparency of stewardship reporting and thus improved the investment ability of countries affected. The study examined the moderating effect of institutional quality on the relationship between international financial reporting standards and foreign direct investment in Nigeria from 2012 to 2018 Institutional quality was measured by political stability and control of corruption while foreign direct investment was measured by foreign investment on equity, foreign portfolio investment on money market and foreign direct investment on trade credits. Ex-post facto research design was adopted and the Generalised Methods of Moments (GMM) was used for the analysis. The study found that with the aid of institutional quality, the IFRS has a significant effect on investment inflows in Nigeria. The study concludes that international financial reporting standards has a significant influence on foreign direct investment with strengthened institution and anticorruption efforts in Nigeria. Therefore, the study recommends that the Nigerian government should strengthen its institutional mechanisms to fully benefit from the adoption of IFRS and drive inflows of foreign direct investment.
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Auer, Matthew R., and Anto Raukas. "Determinants of Environmental Clean-up in Estonia." Environment and Planning C: Government and Policy 20, no. 5 (October 2002): 679–98. http://dx.doi.org/10.1068/c0011j.
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In the early 1990s, the government of Estonia determined that it possessed neither the technical nor the financial resources to clean up Estonia's Soviet-era pollution satisfactorily. Yet data reveal that, during the 1990s, Estonia was relatively adept at cleaning up old contamination. In this paper we identify the key determinants of Estonia's relatively high level of success at environmental remediation. Content analyses of clean-up experiences were performed for three main categories of contaminated sites: ex-military, industrial, and municipal. All analyzed sites were identified by the government of Estonia as priority environmental hot spots in the early 1990s. The most successfully remediated sites were recipients of foreign direct investment or foreign aid, or both, and particularly aid from international financial institutions (IFIs). IFIs and foreign private actors were persuaded to act because of their confidence in the income-generating potential of the projects. In light of this finding, revisions must be made to an oft-cited model of ‘institutions for international environmental cooperation’. In its current form, this model downplays external actors' market-oriented motives.
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Jena, Nihar Ranjan, and Narayan Sethi. "Foreign aid and economic growth in sub-Saharan Africa." African Journal of Economic and Management Studies 11, no. 1 (December 23, 2019): 147–68. http://dx.doi.org/10.1108/ajems-08-2019-0305.
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Purpose The purpose of this paper is to empirically examine the effectiveness of foreign aid in improving economic growth prospects in the sub-Saharan Africa (SSA) region from 1993 to 2017. Design/methodology/approach A sample of 45 SSA countries for the period 1993–2017 is considered for this study. The study uses various econometrics tools such as Pedroni and Kao’s cointegration test, Johansen-Fisher Panel cointegration test, FMOLS and PDOLS in order to ascertain the long-run and short-run dynamics among the variables under consideration. Findings The empirical results find that long-run and short-run relationships exist among foreign aid, economic growth, investment, financial deepening, price stability and trade openness of the SSA economies. The authors also find unidirectional causality running from foreign aid to economic growth. The policymakers in these countries are well-advised to implement suitable policy measures to build on the growth momentum created by foreign aid inflows. Originality/value The study uses a dynamic macroeconomic modeling framework to assess the impact of aid flows on economic growth in the SSA region. Taking into account the diversity of level of growth experienced by the 45 countries in the region, the study uses an appropriate regression technique, i.e., panel dynamic OLS whose results are robust. The finding is also supported by the Granger-causality test and robust cointegration techniques.
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Nguyen, Luan, Tuyen Tran, and Hang Tran. "The impact of foreign aid on household income among ethnic minority groups in Vietnam." Ekonomski horizonti 22, no. 3 (2020): 251–62. http://dx.doi.org/10.5937/ekonhor2003251n.
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Ethnic minorities in Vietnam account for only 15% of the population, but their poverty levels total more than 70% of the national poverty rate. Foreign aid has been an important financial resource supporting the socioeconomic development of ethnic minorities in Vietnam. Based on the empirical research in ethnic households conducted in nine provinces throughout the country, the effect of foreign aid on household income was estimated using the OLS regression model. The results show varying effects in the magnitude and significance among different ethnic groups. Specifically, aid has significantly improved the livelihood of the Cham and Xtieng populations, whereas the results for the Hmong population are detrimental. Consequently, it is suggested that aid and the ethnic policy should be reconsidered in order to reduce inequality among ethnic groups.
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Voronov, Yu P. "After Helping the Poor — Don’t Sleep Well (Nobel Prize in Economic Sciences 2019)." World of new economy 14, no. 1 (November 1, 2020): 77–87. http://dx.doi.org/10.26794/2220-6469-2020-14-1-77-87.
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The article presents three Nobel Prize winners in economic sciences 2019 as well as the results of their researches. The paper highlights the primary goal of the laureates’ research aimed at improving the effectiveness of foreign aid to poor countries. Along with this, the author considered three achievements of the winners noted by the Nobel Committee: randomized field experiments, establishing new links between microeconomics and macroeconomics, the original method of research on the causes of poverty. The winners showed that financial assistance to poor countries should be accompanied, and possibly preceded, by pilot studies of the effectiveness of this assistance. The primary way to improve the efficiency of foreign aid laureates see in creating conditions for self-improvement of their situation by low-income families. And this, according to the laureates, can be achieved through solving the problems of health and education in countries receiving foreign aid. To verify that idea the laureates conducted experiments in Kenya, India, other countries in Africa, Asia, and Latin America. The author also provides evidence that foreign aid to poor countries is less than cash flows going in the opposite direction.
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Mohamed, Masoud Rashid, Shivee Ranjanee Kaliappan, Normaz Wana Ismail, and W. N. W. Azman-Saini. "Effect of foreign aid on corruption: evidence from Sub-Saharan African countries." International Journal of Social Economics 42, no. 1 (January 12, 2015): 47–63. http://dx.doi.org/10.1108/ijse-04-2013-0089.
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Purpose – The purpose of this paper is to examine the effect of foreign aid on corruption in Sub-Saharan African (SSA) countries. Foreign aid is aimed to promote economic growth by complementing the recipient country’s shortfall of financial resource. However, if the recipient country’s quality of governance and institutions is poor, the process of growth will be undermined. Since foreign aid to SSA countries has been increasing substantially in recent years, it is imperative to explore its impact on the level of corruption in the SSA countries. Design/methodology/approach – The paper opted to use a Quantile regression (QR) approach to examine the impact of foreign aid on corruption. The data cover from the year 2000 to 2010 for 42 Sub-Saharan countries. QR is appropriate to achieve the stated objective because the method enables to examine the effect of aid on at different level of corruption. Findings – The paper provides empirical insights on the impact of foreign aid on corruption level in SSA countries. The finding indicates that foreign aid has reduction effect on the corruption level of SSA countries. The effect is likely to be greater in nations that experience a higher level of corruption. The findings further reveal that aid from different bilateral sources has different effect on corruption. As a whole, the findings are statistically significant and robust to alternative measure of corruption. Research limitations/implications – Since the study just focus on Sub-Saharan African countries, the research findings may lack generalization to the entire African countries or poor developing countries that are receiving substantial amount of foreign aid. Therefore, future research should incorporate all the African countries or all poor developing countries. Practical implications – Since the empirical findings reveals that aid reduces the corruption level and aid from different bilateral source have different effect on corruption, it is important to establish more cooperation between donor countries in allocating aid. The conditions attached to aid should be, among other things, be related with improvement of governance and institutional environment. Allocation of aid should be selective such that countries in institutional quality should be among the important criteria for a country to qualify for aid. Originality/value – This paper fulfills the need to study the relationship between foreign aid and corruption in the case of SSA countries. The aid-corruption nexus is relatively under explored issue especially in the case African countries.
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Gnangnon, Sèna Kimm, and Michael Roberts. "Aid for Trade, Foreign Direct Investment and Export Upgrading in Recipient Countries." Journal of International Commerce, Economics and Policy 08, no. 02 (June 2017): 1750010. http://dx.doi.org/10.1142/s1793993317500107.
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This paper examines empirically whether Aid for Trade (AfT) programs and Foreign Direct Investment (FDI) inflows affect export upgrading and, if so, whether their effects are complementary or substitutable. The empirical analysis suggests that AfT and FDI do affect export upgrading, namely export diversification and export quality improvement. Moreover, there is a significant interplay between these two financial flows in affecting export upgrading in recipient countries. The importance of this interplay should be taken into account by policymakers of recipient countries when they are devising both export development strategies and policies/institutions that affect FDI inflows into their countries.
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Pérez Niño, Helena, and Philippe Le Billon. "Foreign Aid, Resource Rents, and State Fragility in Mozambique and Angola." ANNALS of the American Academy of Political and Social Science 656, no. 1 (October 9, 2014): 79–96. http://dx.doi.org/10.1177/0002716214544458.
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Sharing similar colonial and postindependence civil war experiences, Mozambique’s and Angola’s development paths are often contrasted, with foreign aid–dependent Mozambique hailed a success compared to oil-rentier Angola. This article questions the so-called Mozambican miracle and revisits Angola’s trajectory over the past two decades. Paying attention to ruling parties and postwar political economy transitions, we discuss differences and similarities in postconflict reconstruction paths, policy, and institutional fragility. We suggest that large aid flows to Mozambique have contributed to a relaxation of its government’s urgency in creating the financial structure capable of capturing rents from natural resources in contrast to Angola, where the relative absence of official development aid has led Angolan elites to seek tenure prolongation partly through high rent capture and incipient socialization of massive oil rents. We conclude by discussing the likely consequences of these factors in terms of the relative “fragility” and “robustness” of both states, and by discussing the implications for foreign assistance.
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Jayaraman, Tiru K., Lin Sea Lau, and Cheong Fatt Ng. "Role of Financial Sector Development as a Contingent Factor in the Remittances and Growth Nexus: A Panel Study of Pacific Island Countries." Remittances Review 3, no. 1 (May 15, 2018): 51–74. http://dx.doi.org/10.33182/rr.v3i1.426.
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Except for emergencies and for technical assistance for raising skills and institution building, foreign aid to Pacific island countries (PICs) for budgetary support has been phased out since the late 1990s. Because of the small sized domestic markets, foreign direct investment (FDI) is small and is confined to development of tourism infrastructure. On the other hand, inward remittances received from the rising number of islanders migrating overseas for work are increasing, far exceeding aid and FDI. However, influence of remittances on economic growth depends on financial sector development (FSD) for mobilizing the savings from the remittance receipts for domestic investment. This paper assesses the role of FSD in the nexus between remittances and economic growth through a panel study of five major PICs, namely Fiji, Samoa, Solomon Islands, Tonga and Vanuatu. The study findings show that the ongoing efforts for strengthening FSD have to be stepped up by focusing on financial inclusion through spread of branchless banking and promotion of information and communication technology.
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Ch, Narantsetseg, and Hyun-Hee Park. "The Impact of Foreign Aid on Economic Growth in Developing Countries: Focusing on Millennium Challenge Corporation cases." Korea Association for International Commerce and Information 24, no. 2 (June 30, 2022): 131–50. http://dx.doi.org/10.15798/kaici.2022.24.2.131.
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Bilateral relations between the United States and Mongolia have been active since 1990. In particular, the governments of the United States and Mongolia have made steady efforts to promote economic and social cooperation. One of the important factors in the economic field is foreign aid, and the close relationship between the two countries has been upgraded to the next level thanks to the aid from the Millennium Challenge Corporation.
The results of empirical analysis based on data from 1990 to 2020 confirmed Foreign direct investment(FDI), ODA, Export, Import and Infra had a significant on Mongolia's economic growth using the Vector Error Correction Model.
Therefore, it can be concluded that Mongolia's economy and society are moving towards the realm of economic growth and development, with a focus on strengthening the inflow of financial aid from major donors and improving the quality of foreign direct investment, and the business cycle and various resources are improving.
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Ismatov, Aziz. "Do Hybrid Legal Systems Matter in Foreign Legal-Aid Programmes? Some Philosophical Aspects of Legal Aid in Uzbekistan as Provided by the Donor States." Asian Journal of Law and Society 8, no. 2 (June 2021): 351–71. http://dx.doi.org/10.1017/als.2020.44.
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AbstractSince the fall of socialism in Eastern Europe, the former Soviet Union, and some states of Southeast Asia, the international financial institutions and individual donor states have initiated wide-scale legal-aid programmes to assist these states in their transition from socialism to a market economy. Whereas the aid from financial institutions vis-à-vis recipient states is often agreed upon specific conditionalities, the donor states design their foreign legal aid according to individual preferences, although sometimes with references to universal goals. Currently, various donor states provide legal aid to Uzbekistan. Given the fact that Uzbekistan is the former Soviet Republic that still bears multiple traces of a socialist legal system and additionally integrates indigenous informal law, this research provides an analysis of how different donor states base their legal-aid activities on entirely different philosophies and levels of gravity, and how receptive the hybrid structure of Uzbekistan’s law is towards such aid.
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Johnson, Juliet. "Building Democracy in Contemporary Russia: Western Support for Grassroots Organizations." Canadian Journal of Political Science 38, no. 4 (December 2005): 1087–88. http://dx.doi.org/10.1017/s000842390535997x.
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Building Democracy in Contemporary Russia: Western Support for Grassroots Organizations, Sarah L. Henderson, Ithaca: Cornell University Press, 2003, pp. xii, 229.In this well-researched and provocative book, Sarah Henderson asks to what extent Western aid can facilitate the emergence of civil society in countries where civil society is domestically weak. Through an in-depth study of Western aid to Russian women's organizations, she argues that foreign assistance has dramatically affected NGO development in Russia, but not always in expected or positive ways. On the one hand, she finds that external funding “made a tremendous difference in improving and increasing the short-term financial viability, organizational capacity, and networking skills among recipient groups” (9). On the other, she argues that foreign aid contributed to at least four pathological developments within the NGO community. First, funded groups tended to copy the aid agencies' top-heavy and bureaucratic organizational structures. Second, funded groups lacked grassroots constituencies because they shifted their policy agendas to reflect aid agencies' preferences rather than objective domestic needs. Third, foreign aid encouraged the development of a “civic elite” among the domestic NGO community, exacerbating the differences between those groups that received funding and those that did not. Finally, the competition for foreign aid dollars encouraged uncooperative behaviour among funded Russian NGOs rather than bridge building and information sharing. She argues that these problematic unintended consequences were the result of avoidable mistakes in the foreign aid process, and states bluntly that “NGO development is not synonymous with civil society development, and the development of one does not necessarily imply the advancement of the other” (11).
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An, Jiyoun, and Bokyeong Park. "Natural Disasters and International Financial Accessibility in Developing Countries." Asian Economic Papers 18, no. 1 (March 2019): 245–61. http://dx.doi.org/10.1162/asep_a_00682.
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This study examines the impact of natural disasters on affected countries’ accessibility to international financial resources. We find empirical evidence that natural disasters significantly downgrade the sovereign credit rating of an affected country, an indicator of international financial accessibility. This finding is robust in developing countries, implying that they are faced with additional difficulties in financing post-disaster recovery costs compared with developed countries. Among disasters, droughts and storms display a particularly significant downgrading effect. Further results show that foreign aid from the international community helps to improve the accessibility, implying a possible acceleration of the post-disaster recovery in recipient countries.
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Luqman, Muhammad, ,. Mirajul Haq, and Irfan Lal. "Foreign Aid and Macroeconomic Performance in Pakistan: Exploring the Role of Local Financial Sector Development." Forman Journal of Economic Studies 09 (December 30, 2013): 109–36. http://dx.doi.org/10.32368/fjes.20130906.
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David, Antonio C. "How do International Financial Flows to Developing Countries Respond to Natural Disasters?" Global Economy Journal 11, no. 4 (December 2011): 1850243. http://dx.doi.org/10.2202/1524-5861.1799.
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This paper uses multivariate dynamic panel analysis to examine the response of international financial flows to natural disasters. The models estimated for a large sample of developing countries point to differentiated responses of specific types of financial flows. The results show that remittance inflows increase significantly in response to shocks to both climatic and geological disasters, thus confirming their compensatory nature. The models suggest a nuanced role for foreign aid. While the responses of aid flows to natural disaster shocks in general tend not to be statistically significant, international assistance to low income countries increases following geological disaster shocks. Furthermore, the results show that typically, other private capital flows (bank lending and equity) do not attenuate the effects of disasters and in some specifications, even amplify the negative economic effects of these events.
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Makoni, Patricia Lindelwa. "FDI and FPI Determinants in Developing African Countries." Journal of Economics and Behavioral Studies 9, no. 6(J) (January 15, 2018): 252–63. http://dx.doi.org/10.22610/jebs.v9i6(j).2021.
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We examine drivers of foreign direct investment (FDI) and foreign portfolio investment (FPI) in nine selected African economies, during the period 1980 to 2014, with particular interest in the role of financial market development. We set out to explore the drivers of FDI and FPI in selected African countries, respectively. We employ the dynamic GMM methodology to assess the motivators of inward foreign flows. The results show that FDI inflows are generally dependent on past inflows of FDI, low inflation, infrastructural development, and real GDP growth rate; while stock market capitalisation, commercial bank assets gauged against commercial and central bank assets as well as domestic credit to the private sector by banks intermediate for financial market development. On the other hand, we find that FPI inflows are attracted to foreign destinations due to previous FPI inflows, the real exchange rate, inflation rates and the presence of developed infrastructure. Further, developed financial markets, as proxied by stock market capitalisation, were found to significantly and positively influence inward FPI flows, while a closed financial account and low interest rate discouraged FPI. The significant contribution of this paper is that its findings empirically confirm FDI and FPI theory, as postulated in Dunning’s eclectic paradigm insofar as the main “location†variables that enhance host country attractiveness are concerned, specifically in the African context. In light of these findings, we recommend that policy makers strengthen their domestic markets, complemented by appropriate regulations and institutions to attract foreign investment flows, while reducing their dependency on international aid and loans.
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Makoni, Patricia Lindelwa. "FDI and FPI Determinants in Developing African Countries." Journal of Economics and Behavioral Studies 9, no. 6 (January 15, 2018): 252. http://dx.doi.org/10.22610/jebs.v9i6.2021.
Full textAbstract:
We examine drivers of foreign direct investment (FDI) and foreign portfolio investment (FPI) in nine selected African economies, during the period 1980 to 2014, with particular interest in the role of financial market development. We set out to explore the drivers of FDI and FPI in selected African countries, respectively. We employ the dynamic GMM methodology to assess the motivators of inward foreign flows. The results show that FDI inflows are generally dependent on past inflows of FDI, low inflation, infrastructural development, and real GDP growth rate; while stock market capitalisation, commercial bank assets gauged against commercial and central bank assets as well as domestic credit to the private sector by banks intermediate for financial market development. On the other hand, we find that FPI inflows are attracted to foreign destinations due to previous FPI inflows, the real exchange rate, inflation rates and the presence of developed infrastructure. Further, developed financial markets, as proxied by stock market capitalisation, were found to significantly and positively influence inward FPI flows, while a closed financial account and low interest rate discouraged FPI. The significant contribution of this paper is that its findings empirically confirm FDI and FPI theory, as postulated in Dunning’s eclectic paradigm insofar as the main “location” variables that enhance host country attractiveness are concerned, specifically in the African context. In light of these findings, we recommend that policy makers strengthen their domestic markets, complemented by appropriate regulations and institutions to attract foreign investment flows, while reducing their dependency on international aid and loans.
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Aljonaid, Nadeem Abdulmalik Abdulrahman, Fengming Qin, and Zhaoyong Zhang. "The Heterogeneous Impact of Sectoral Foreign Aid Inflows on Sectoral Growth: SUR Evidence from Selected Sub-Saharan African and MENA Countries." Journal of Risk and Financial Management 15, no. 3 (February 25, 2022): 107. http://dx.doi.org/10.3390/jrfm15030107.
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A great deal of the foreign aid–growth literature finds that the net effect of aggregate aid on total growth appears to be insignificant. This study argues that this aid–growth nexus can be better explained by testing the variation responses for each of growth sectors to their corresponding allocated aid inflows. It aims to investigate the heterogeneous effects of sectorally allocated aid inflows on their corresponding growth sectors (industry, agriculture and services) using data from 37 Sub-Saharan African and MENA-recipient developing nations from 1996 to 2017. We constructed two measures; one is the (SAASG) Sectoral-Allocated-Aid-for Sectoral-Growth, which was used as a major measure in the first two econometric specifications, and another one was the revised Clemens early-impact aid categories measure, which was used as the secondary measure in the third specification. The seemingly unrelated regression framework (SUR) was employed as the basic estimation approach, while the GMM approach was used to check robustness. The empirical findings revealed clear systematic impacts associated with aid distributed to each sector of growth, which may explain why the net effect of overall aid on total growth appears to be insignificant. The findings show that allocated aid inflows have a strong positive impact on agricultural growth, helping boost overall growth, whereas aid allocated to the service and industrial growth sectors tends to minimize the net benefits of total aid on growth due to financial and institutional reasons. The success of the planned scaling-up of aid to recipient countries depends on the financial system, institutional quality policies, and the ability to design a way to maintain incentives in the MENA and SSA regions’ selected recipient countries to overcome structural bottlenecks of sectoral growth.
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Fielding, David, and Anja Shortland. "The dynamics of terror during the Peruvian civil war." Journal of Peace Research 49, no. 6 (November 2012): 847–62. http://dx.doi.org/10.1177/0022343312448501.
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The international community has a declared intention to protect civilians from deliberate violence in civil conflicts. The optimal type of foreign intervention and its optimal timing are likely to depend on the combat strategies of the belligerents. Weak belligerents unable to provide economic incentives and security guarantees to civilians often follow a strategy of intimidation and terror. In this case, foreign financial support for one side could affect the strategies of both sides in several different ways, and the interaction between the two sides’ strategies could magnify the resulting impact on civilian casualties. Using a new monthly time-series dataset, we explore the factors associated with variations in the intensity of civilian abuse by participants in the guerrilla war in Peru during the 1980s and 1990s. We show that an increase in civilian abuse by one side was strongly associated with subsequent increases in abuse by the other. In this type of war, foreign intervention could substantially reduce the impact on civilians of a sudden rise in conflict intensity, by moderating the resulting ‘cycle of violence’. In practice, foreign interventions had a mixed record in Peru: financial support for the Peruvian military raised the level of violence against civilians, but counter-narcotics aid and development aid reduced it. These effects are consistent with a model in which different types of intervention have different effects on belligerents’ resource capacity and on the opportunity cost of fighting.