Public Financial Management Systems and Aid Effectiveness

다국어 초록 (Multilingual Abstract)

Purpose: The purpose of this study is to examine whether strengthening public financial management (PFM) systems of aid recipient countries makes aid more effective and promotes economic growth.
Originality: This study is the first attempt to empirically test whether sound PFM systems promote aid effectiveness and economic growth. While the past studies focused on the aid impact on PFM’s revenue, savings, and investment, and thereby construed aid’ impact on economic growth, this paper aims to examine with empirical data the causal relationship between PFM systems with aid and economic growth directly. Therefore, a different approach to aid effectiveness is explored in relation to PFM system.
Methodology: Using the data gathered by the World Bank and PEFA (Public Expenditure and Financial Accountability) Assessment & Data from 60 aid-recipient countries over the period of 2001-2015, this study has analyzed the impact of aid and PFM systems on economic growth of developing nations.
Result: While the overall net marginal impact of aid on economic growth is negative, the marginal impact of PFM-1 through PFM-7 on economic growth is positive through the interaction with aid.
Conclusion and Implication: Empirically, this paper has identified that aid has promoted strong and sound PFM systems, which have, in turn, led to greater economic growth.

참고문헌 (Reference)

1 Easterly, W., "“Why Doesn’t Aid Work?” Lead Essay"

2 OECD, "What are the benefits of using country systems?" Task Force on Public Financial Management 1-3, 2011

3 OECD, "Using Country Public Financial Management Systems: A Practitioner’s Guide" 2011

4 Dollar, D., "The Increasing Selectivity of Foreign Aid, 1984–2003" 34 (34): 2034-2046, 2006

5 Mohammed Seid Hussen, "The Impact of Foreign Aid on Economic Growth in Ethiopia" 국제지역연구소 13 (13): 87-112, 2012

6 Papanek G. F., "The Effect of Aid and Other Resource Transfers on Savings and Growth in Less Developed Countries" 82 : 935-950, 1972

7 OECD, "Stocktaking Study of PFM Diagnostic Instruments"

8 Mokoro, "Putting Aid on Budget: Synthesis Report, A Study for the Collaborative Africa Budget Reform Initiative (CABRI) and the Strategic Partnership with Africa (SPA)" Mokoro Ltd 2008

9 PEFA, "Public Financial Management Performance Measurement Framework (Revised)"

10 PEFA., "Public Financial Management Performance Measurement Framework"

11 OECD, "Paris Declaration on Aid Effectiveness and the Accra Agenda for Action, Accra Ghana"

12 OECD, "Paris Declaration for Aid Effectiveness"

13 de Renzio, Paolo, "Measuring the Performance of PFM Systems" GSDRC 2015

14 OECD, "Manila Consensus on Public Financial Management Partnering to Strengthen Public Financial Management for Effective States, Task Force on Public Financial Management"

15 Hjertholm, "Macroeconomic Issues in Foreign Aid" Institute of Economics, University of Copenhagen 3-6, 2000

16 Rosenstein-Rodan, P. N., "International Aid for Underdeveloped Countries" 43 (43): 107-138, 1961

17 OECD, "Harmonising Donor Practices for Effective Aid Delivery, DAC Guidelines and Reference Series"

18 PEFA, "Handbook Volume I: The PEFA Assessment Process – Planning, Managing and Using PEFA"

19 wPEFA, "Framework for Assessing Public Financial Management"

20 Griffin, K. G., "Foreign Assistance: Objectives and Consequences" 18 (18): 313-337, 1970

21 Chenery, H. B., "Foreign Assistance and Economic Development" 56 (56): 679-733, 1965

22 Benedek, D., "Foreign Aid and Revenue:Still a Crowding Out Effect?”" IMF 2012

23 Lee, K. W., "Fiscal Behavior of Aid Recipient Countries" 1 (1): 35-38, 2014

24 Lee, K. W., "Do emerging donors allocate aid as DAC members do? The case of Korea in the Millennium era" 24 : 977-988, 2012

25 이계우, "Development Effectiveness of the Paris Declaration: An Empirical Evaluation" 한국개발연구원 35 (35): 65-89, 2013

26 이계우, "Can the Current Aid to Latin America Contribute to Economic Growth and Poverty Alleviation?" 한국라틴아메리카학회 25 (25): 83-114, 2012

27 OECD, "Busan Partnership for Effective Development Co-operation" 2011

28 Dabla-Norris, E., "Budget Institutions and Fiscal Performance in Low-income Countries" IMF 2010

29 Allen, R., "Assessing and Reforming Public Financial Management: A New Approach" World Bank 2004

30 World Bank, "Assessing Aid: What Works, What Doesn’t andWhy?" Oxford University Press 1998

31 Howes, Stephen, "An Overview of Aid Effectiveness Determinants and Strategies" Development Policy Centre, Crawford School of Public Policy, The Australian National University 2011

32 Burnside, C., "Aid, Policies, and Growth" 90 (90): 847-868, 2000

33 Burnside, C., "Aid, Policies, and Growth" World Bank 1997

34 Quibria, M. G., "Aid Effectiveness: Research, Policy and Unresolved Issues" 1 (1): 75-87, 2014

35 Hansen, H., "Aid Effectiveness Disputed" 12 (12): 375-398, 2000

36 OECD, "Aid Effectiveness 2005-2010: Progress in Implementing Paris Declaration"

37 Collier P., "Aid Allocation and Poverty Reduction" 46 : 1475-1500, 2002

38 한아름, "Aid Allocation Practices and Private Business" 국제개발협력학회 7 (7): 79-113, 2015

39 United Nations, "Addis Ababa Action Agenda of the Third International Conference on Financing for Development (Addis Ababa Action Agenda)"