Document Type
Journal Article
Department/Unit
Department of Economics
Title
The Impacts of Biased Resource Allocation on the Effectiveness of Official Development Assistance
Language
English
Abstract
Many developing countries are receiving official development assistance (ODA). Whether ODA is beneficial or harmful to the receiving country is controversial in the literature. This paper analyzes this issue from a new angle by adopting the framework of competitiveness which allows us to link resource allocation with economic growth. Under this framework, we point out that the mechanism of resource allocation influences the effectiveness of ODA on economic growth. By applying data envelopment analysis (DEA) to competitiveness, we capture the effects of inefficient and biased allocation of resources on ODA. The data confirm the co-existence of positive and negative impacts of ODA. Finally, we conclude that current ODA is not efficient in helping most of the receiving countries.
Keywords
Official development assistance, data envelopment analysis, endowment effect, misallocation effect, biased effect
Publication Date
2018
Source Publication Title
The Singapore Economic Review
Publisher
World Scientific Publishing
DOI
10.1142/S0217590818500285
ISSN (print)
02175908
ISSN (electronic)
17936837
APA Citation
Li, S., & Tsang, C. (2018). The Impacts of Biased Resource Allocation on the Effectiveness of Official Development Assistance. The Singapore Economic Review. https://doi.org/10.1142/S0217590818500285