Bachelor of Science
Dr. Gerald Prante
Dr. Eric Kyper
Dr. Michael Craig
This research paper is an empirical study of the impact of official development assistance and official aid received, [henceforth, to be referred to as “foreign aid”], on life expectancy and GDP per capita in Latin America and the Caribbean. I used a panel dataset of 19 countries dated from 1996 to 2014 to perform two distinctive regressions using the OLS method. In addition, an exploration of the impact of GDP per capita on life expectancy was conducted to determine whether there was a cause and effect phenomenon; that is, testing whether an impact of foreign aid on GDP per capita would have a positive spillover effect on life expectancy. The findings suggest that foreign aid does not seem to have a positive impact on either GDP per capita or life expectancy. However, GDP per capita is strongly correlated with increased life expectancy. This could be the cause of lack of good governance. Recommendations to policy makers and governments include more investments in the education sector for human capital development and investments in sectors that will spur economic growth per capita while focusing on creating an enabling environment and reducing corruption so that foreign aid can be leveraged to create growth.
Etienne, Ancito, "Foreign Aid Allocation and Impact in Latin America and the Caribbean (LAC): A Cross-Country Analysis of Foreign Aid Impact on GDP Per Capita and Life Expectancy" (2017). Undergraduate Theses and Capstone Projects. 95.