Foreign aid, corruption and poverty. Paraguay’s case
Keywords:
Poverty, Foreign Aid, Corruption.Abstract
Theoretical proposals divide Foreign Aid’s effects into two streams. On one hand, the optimists who consider that with the additional income received by a country, they would reduce its poverty. On the other hand, the skeptics who affirm that the additional income only increases corruption. In Paraguay's case, Foreign Aid has been growing at a rate of 9% and corruption has been reducing, although at a very slow pace and on a very small scale, according to Transparency International reports. The research set out to corroborate whether Foreign Aid is associated with an increase or reduction of poverty from a macroeconomic perspective, and through a multiple regression model, it was possible to show that the increase in poverty was associated with an increase in Foreign Aid, as the skeptics pointed out. This investigation has not been able to corroborate the association of corruption with poverty or with Foreign Aid, so there is a gap to continue investigating either by the same or other authors.
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