Exploratory Test of the Effectiveness of Educational Aid in Official Development Assistance

Exploratory Test of the Effectiveness of Educational Aid in Official Development Assistance

Conventional studies are limited in identifying the effectiveness of each country in seeking educational support. This study hypothesizes that educational aid through Official Development Assistance (ODA) is positively effected by ODA subprograms. It aims to identify the determinants of economic growth and the living standard levels in 15 Asian countries, focusing particularly on the education aid effects of Official Development Assistance (ODA). Two indexes were used: (1) the annual ODA grants to Korea, with aid type as the key independent variable; and (2) the human development index (HDI). The pooled OLS model, the fixed effects (FE) model, and a random effects (RE) model were analyzed. The results show that the economic and social impacts of ODA based on panel data were significant and that specific subprograms were more likely to directly affect HDI. In particular, the effect of aid on education was statistically significant. However, the findings show a negative impact which means it is difficult to estimate the short-term effectiveness of educational aid and it is nonlinear relation.