Can ODA Enhance Economic Development? Special Research on Australian Fund for the Growth Effectiveness in Laos
- 1 Department of Evaluation, Ministry of Planning and Investment, Vientiane, Lao
Abstract
In Laos, ODA from Australia pays over USD 40 million each year in the field of educational improvement. Australia has been assisting and promoting the economy of Laos for several decades, which establishes a good scenario of the two countries’ ties (between Australia and Laos). Firstly, the author examines the relationship between the human development index and economic growth by using a bivariate correlation testing approach of two variables as provided by Pearson and Spearman, and the use of the cointegration method by Johansen test on VECM analysis, this estimation is vital for time series data. In the final finding, there was a result to denote that, education can have a significant relation to enhance economic growth in Lao PDR. Higher education reflects higher economic development by relying on the test result of Pearson with a p -value of .02 and the Spearman test with a p -value of .049, of which the p -value was less than .05. For VECM analysis, the result showed that education in both the long and short run has a negative direction in relation to economic development, in the short run the ODA from Australia showed an opposing direction to growth, but in the long run, such ODA has a positive relation to economic growth with significance. Finally, this paper detailed Laos’ future policy on promoting investment in the field of technological development and innovation; a suitable law and regulation for technological investment should be effectively enacted for ODA in the field of educational improvement, eventually good educational people can build investment and national economic development of Laos.
- Agbonifor, B. A. (1998). The Business Enterprises in Nigeria, Lagos. Longman Ariyo, D. (2008). Small Firms Are the Backbone of the Nigerian Economy. Africa Economic Analysis. Academy of Management Journal, 1, 109-124.
- Aghoutane, K., & Karim, M. (2017). The Impact of Foreign Aid on Economic Growth in Morocco: Econometric Analysis Using VECM. International Journal of Economic and Finance, 9, 87-93. https://doi.org/10.5539/ijef.v9n5p87
- AID Program Report Performance Summary (2020-2021). Laos, Australian Government, Department of Foreign Affairs and Trade, 2019. https://www.dfat.gov.au/sites/default/files/2020-21-aid-budget-summary.pdf https://www.dfat.gov.au/development/australias-development-budget-and-statistical-information
- Anaeto, F. C, Asiabaka, C. C., Ani, A. O., Nnadi, F. N., Ugwoke, F. O., Asiabaka, I. P., Anaeto, C. A., & Ihekeronye, N. (2016). The Roles of Science and Technology in National Development. International Standard Journal Number, 3, 38-43.
- Behrman, J. R., & Wolfe, B. L. (1987). Investments in Schooling in Two Generations in Pre-Revolutionary Nicaragua: The Roles of Family Background and School Supply. Journal of Development Economics, 27, 395-419. https://doi.org/10.1016/0304-3878(87)90024-1
- Berman, E., Bowman, J., West, J., & Van Wart, M. (2016). Human Resource Management in Public Service. Sage Press.
- Birdsall, N., Ross, D., & Sabot, R. (1995). Inequality and Growth Reconsidered: Lessons from East Asia. World Bank Economic Review, 9, 477-508. https://doi.org/10.1093/wber/9.3.477
- Carroll, A., & Buchholtz, A. (2008). Business and Society: Ethics and Stakeholder Management (7th ed.). Cengage Learning. The Data Source of the Human Development Index. https://nibmehub.com/opac-service/pdf/read/Business%20and%20Society%20_%20 ethics%20and%20stakeholder%20management-%207th%20edition.pdf
- Deraniyagala, S. (1995). Technical Change and Efficiency in Sri Lanka’s Manufacturing Industry. Ph.D. Dissertation, University of Oxford.
- Dibie, R., & Dibie, J. (2014). The Dichotomy of Capacity Building and Unemployment in Ethiopia. Africa’s Public Service Delivery and Performance Review, 2, 25-76. https://doi.org/10.4102/apsdpr.v2i3.59
- Kumar, B. K., Rajan, G. R., & Zingales, L. (2001). What Determines Firm Size? CRSP Working Paper No. 496, and USC Finance & Business Econ. Working Paper No. 01-1.
- Malerba, E., & Orsenigo, L. (1997). Technological Regimes and Sectorial Patterns of Innovative Activities. Industrial and Corporate Change, 6, 83-117. https://doi.org/10.1093/icc/6.1.83