Abstract
The aim of the present study is to investigate the impact of foreign aid inflows on
economic growth in selected four countries namely Pakistan, India, Bangladesh
and Sri Lanka of SAARC. Specifically, the focus of the study is to conduct a
comparative analysis of foreign aid and economic growth nexus in Pakistan with
other countries. For checking the unit root in the data Augmented Dickey Fuller
test has been used. The estimation of regression results has been computed by
using fixed effect method. The main findings of the study are foreign aid inflows
that foreign aid inflows put negative effects on the economic growth of Pakistan
and all other SAARC. Moreover, education, gross capital formation and
population growth rate shows a positive relationship with economic growth.
Whereas, inflation turned out insignificant with the expected negative sign.
Furthermore, the initial GDP also turned negatively significant showing the
absence of catch up effect in Pakistan and overall selected SAARC countries. The
findings suggest that Pakistan and other SAARC countries should efficiently
utilized the domestic resources instead of dependence on foreign aid for
accelerating economic growth.
Aakif Hussain, Muhammad Tariq, Fazli Qadir, Imran Ullah Saeed. (2018) Foreign Aid and Economic Growth Nexus: A comparative study of Pakistan with four SAARC countries, Journal of the Research Society of Pakistan, Volume 55, Issue 1.
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