@workingpaper{Asongu2014bu,
title = {On foreign aid distortions to governance},
author = {Simplice A Asongu},
editor = {African 2014 Governance and Development Institute WP/14/003},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/On-Foreign-aid-distortions-to-governance.pdf},
year = {2014},
date = {2014-01-01},
abstract = {The Kangoye (2013, TDE) findings on the negative nexus between foreign aid unpredictability
and governance could seriously affect debates in academic and policy making circles. Using the
theoretical underpinnings of the celebrated Eubank (2012, JDS) literature, we first confirm
Kangoye’s findings. Then extend the concept of governance from corruption to political,
economic, institutional and general versions of the phenomenon. Findings from the extension run
counter to those of Kangoye. It follows that in the presence of foreign aid uncertainty,
governments could be constrained to improve governance standards in exchange for or
anticipation of more dependence on local tax revenues. The empirical evidence is based on 53
African countries for the period 1996-2010. Two direct policy implications result. First, the
Kangoye findings for developing countries are relevant for Africa. Second, when the concept of
governance is not restricted to corruption, the findings become irrelevant for the continent.},
keywords = {Uncertainty; Foreign aid; Governance; Development; Africa},
pubstate = {published},
tppubtype = {workingpaper}
}