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Journal Article

The effect of foreign aid on income inequality: Evidence from panel cointegration

Authors

  • Herzer
  • D.
  • Nunnenkamp
  • P.

Publication Date

DOI

10.1016/j.strueco.2012.04.002

JEL Classification

D31 F35 C23

Key Words

cointegration

foreign aid

inequality

Panel data

Ungleichheit

This paper examines the long-run effect of foreign aid on income inequality for 21 recipient countries using panel cointegration techniques to control for omitted variable and endogeneity bias. We find that aid exerts an inequality increasing effect on income distribution.

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