TY  - JOUR
TI  - How Foreign Aid Affect Developing Countries: The Case of Ethiopia
AB  - Foreign aid has been an essential tool for the socio-economic development of developing countries since 1960s. It is described by OECD as the financial,technical assistance and commodity flow to the countries that are in the list of DAC (Development Assistance Committee). US’s Marshall Plan is a well-known development assistance program, which was established between 1948 and 1951 under the European Recovery Program to support Europe in economic crisis after a war became successful in reducing poverty while increasing economic growth. By taking the Marshall plan as a model, developed countries have been supporting the developing countries since then. Recently, the Millennium Development Goals was also launched in New York in 2000 to finance economic growth of poor countries. New actors from other parts of the world took their places in providing development assistance. Despite receiving more than 600 billion USD in the context of foreign aid, large part of Africa has still remained underdeveloped and in an extreme poverty. In this paper, we study the impacts of foreign aid to socio-economic development to Ethiopia. After reviewing the development and foreign aid literature from primary and secondary sources, this study benefited from data gathered from World Bank Database, Transparency International and Freedom House, and then time series datawere evaluated by regression analysis. Our findings indicate that foreign aids do not have a major influence on GDP growth; but it has a considerable influence on FDI (foreign direct investment) and unemployment rate in Ethiopia. However, it is observed that foreign aid has negatively correlated with democracy and corruption levels in the country. Although, the amount of foreign aid has been continuously increasing, Ethiopia has remained one of the most corrupt and authoritarian African countries according to related indices. Consequently, our study concludes that foreign aid should be redesigned to encourage and reward receiving countries to advancetheir democracy and eliminate corruption within the context of recent philosophy and principle of collaborative governance for long term development.
AU  - AYHAN, EMRAH
AU  - ÖNDER, MURAT
AU  - FARAH, Ali Mohamed
PY  - 2018
JO  - Avrasya Etüdleri
VL  - 1
IS  - 53
SN  - 1300-1604
SP  - 7
EP  - 38
DB  - TRDizin
UR  - http://search/yayin/detay/287967
ER  -