The impacts of biased resource allocation on the effectiveness of official development assistance

Sung Ko LI*, Chun Kei Tsang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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.

Original languageEnglish
Pages (from-to)239-256
Number of pages18
JournalSingapore Economic Review
Volume65
Issue number1
DOIs
Publication statusPublished - 1 Mar 2020

Scopus Subject Areas

  • Economics and Econometrics

User-Defined Keywords

  • biased effect
  • data envelopment analysis
  • endowment effect
  • misallocation effect
  • Official development assistance

Fingerprint

Dive into the research topics of 'The impacts of biased resource allocation on the effectiveness of official development assistance'. Together they form a unique fingerprint.

Cite this