The Effect Of International Aid On Per Capita Income: A Panel Data Analysis

Abstract

Poverty, a problem that has existed throughout the history of humanity and sought a solution, is a phenomenon that is struggled under the joint responsibility of world states, national and international organizations. As a result of the positive and economic developments after the World War II, with the implementation of social spending programs, a transition to a systematic structure has been achieved in the struggle against poverty. In this study, a panel data set covering the period 2004-2018 for 23 countries was constructed to examine the impact of international aid on per capita income. The study results show a positive relationship between the international aid, population, and human development index and per capita gross domestic product at the 5% significance level, a negative relationship between the unemployment rate and the Gini coefficient and per capita income at the 5% significance level. If the international aid increases by 1%, the per capita income increases by 0.08%, if the population increases by 1%, the per capita income increases by 1.45%,  if the value of human development increases by 1%, the per capita income increases by 1.60%. If the unemployment rate increases by 1%, per capita income decreases by 0.15%; if the Gini coefficient increases by 1%, the per capita income decreases by 0.63%.