FOREIGN AID AND ECONOMIC GROWTH: LESSONS FOR PAKISTAN
FOREIGN AID AND ECONOMIC GROWTH: LESSONS FOR PAKISTAN

Summary/Abstract: Even after more than sixty years of foreign aid flows of US$ 88325 million from various countries aimed to boost economic growth, still every third Pakistani lives below the poverty line. This study used the Error Correction Model (ECM) to revisit whether foreign aid contributed to economic growth in Pakistan over the period 1972 through 2012. Empirical results support the existence of a significant negative relationship between foreign aid and economic growth. The study makes a valuable addition to the body of literature on the impact of foreign aid on economic growth. The results are expected to guide policymakers with regards to the impact of foreign aid flows on Pakistan economic growth and development.

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