Elite Capture of Foreign Aid : Evidence from Offshore Bank Accounts
Do elites capture foreign aid? This paper documents that aid disbursements to highly aid-dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth management, but not...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/493201582052636710/Elite-Capture-of-Foreign-Aid-Evidence-from-Offshore-Bank-Accounts http://hdl.handle.net/10986/33355 |
| Summary: | Do elites capture foreign aid? This
paper documents that aid disbursements to highly
aid-dependent countries coincide with sharp increases in
bank deposits in offshore financial centers known for bank
secrecy and private wealth management, but not in other
financial centers. The estimates are not confounded by
contemporaneous shocks such as civil conflicts, natural
disasters, and financial crises, and are robust to
instrumenting with predetermined aid commitments. The
implied leakage rate is around 7.5 percent at the sample
mean and tends to increase with the ratio of aid to GDP. The
findings are consistent with aid capture in the most
aid-dependent countries. |
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