MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM
BANKING UNIVERSITY HO CHI MINH
*****
VU DUC BINH
THE IMPACTS OF OFFICIAL DEVELOPMENT ASSISTANCE
ON ECONOMIC GROWTH IN DEVELOPING COUNTRIES
Major: Finance - Banking
Code: 9.34.02.01
THESIS SUMMARY
HO CHI MINH CITY – 2019
MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM
BANKING UNIVERSITY HO CHI MINH
*****
VU DUC BINH
THE IMPACTS OF OFFICIAL DEVELOPMENT ASSISTANCE
ON ECONOMIC GROWTH IN DEVELOPING COUNTRIES
Major: Finance – Banking
Code: 9.34.02.01
THESIS SUMMARY
ACADEMIC ADVISOR
ASSOCIATE PROFESSOR., PHD. DANG VAN DAN
HO CHI MINH CITY – 2019
INTRODUCTION
1. The necessity of the study
Practical researchs in many countries receiving ODA in the world shows that
ODA capital is not always effective. Sometimes, ODA capital negatively impacts
economic growth or negative impact reduces the national economy. For example,
the scale of public debt increases rapidly, the nation's debt repayment burden
increased, there may be risks associated with fluctuations in interest rates and
exchange rates, official development assistance does not contribute to economic
growth when this capital is put into investment but ineffective, rampant and
wasteful investment, problems of corruption, group benefits… An Official
development assistance may has a positive or negative impact on economic growth
in the country receiving this capital. This shows the significance of the need for a
clear thorough study of the impact of official development assistance on economic
growth.
2. Objectives of the study
The overall objective of the thesis is to assess the impact of official
development assistance on economic growth in developing countries. Besides,
considering how ODA affects economic growth in terms of public administration
quality, capital absorption and corruption management quality of developing
countries. On the basis of the thesis findings, a thesis will provide an appropriate
solution for this capital source, contributing to the economic growth in developing
countries, including Vietnam.
3. Scope of the study
The thesis studies the impact of official development assistance capital on
economic growth. The scope of the thesis research for 68 developing countries with
the study period is 21 years from 1996 to 2016.
4. Methodology of the study
In order to achieve the objectives of the study, the main research methods
used methods of econometric analysis.
The author used classical linear estimation methods of panel data model such
as Pooled OLS, Fixed effect (FEM) and Random effect (REM). The thesis uses the
method of moment 2-step (SGMM two-step) because this method handles some
defects of the model such as: self-correlation, heteroscedasticity and endogenous.
5. Scientific and practical significance of the thesis
Scientific significance: currently, assessing the impact of official
development assistance on economic growth is still a controversial issue. Especially
in Vietnam, the previous studies related to the topic of official development
assistance only used qualitative analysis studies. Therefore, this research direction
contributes in terms of scientific significance to the field of research on this topic.
The results of quantitative analysis and empirical evaluation of the thesis will
contribute to scholarly research for a specific developing country like Vietnam and
other developing countries in the world.
Practical significance: the results of empirical analysis and evaluation of the
thesis are used to make more basic recommendations, provide important evidence to
help policy makers and government regulators. The state in developing countries
has an orientation to regulate suitable macro policies for this source of capital to
ensure the goal of actively supporting economic growth, creating more jobs and
improving living standards. spiritual qualities of people, stability and socio-
economic development. In addition, the thesis's completion of this research topic
also contributes to forming the research foundation for further studies for Vietnam
alone and create a more scientific perspective in making strategic decisions for
official development assistance.
CHAPTER 1: OVERVIEW OF RESEARCH AND THEOREOTICAL BASIS
ABOUT THE IMPACTS OF OFFICIAL DEVELOPMENT ASSISTANCE
ON ECONOMIC GROWTH
1.1 Theoreotical basis about official development assistance
1.1.1 Theories about official development assistance capital
According to the Organization for Economic Cooperation and Development
(OECD), the concept of ODA is given as follows: “ODA is the official transfer of
support established with the main purpose of promoting socio-economic
development of developing countries. The financial condition of this transfer of
support is of a preferential nature and the non-refundable element is at least 25%”
(OECD, 1991). According to the World Bank, the definition of ODA is as follows:
“ODA is part of the official development financing (ODF), which includes non-
refundable aid plus preferential loans accounting for at least 25% of total aid, called
ODA. Official Development Finance (ODF) is all the financial resources developed
by governments of developed countries and multilateral organizations for
developing countries” (WB, 1999).
1.1.2 Classification of official development assistance
Under according to the nature of capital supply of the official development
assistance capital, there are 3 types: non-refundable ODA capital, preferential ODA
loan capital and ODA capital from mixed loans.Under sponsors provide official
development assistance, there are 2 types: bilateral ODA and multilateral ODA.
Under the terms and conditions of official development assistance, there are two
types: non-binding ODA and binding ODA. In the form of providing official
development assistance, there are 7 types: relief and emergency aid, food assistance,
independent technical cooperation, budget support, bar balance support. math,
project support and non-project support.