KDI Journal of Economic Policy (Dec 2007)

An Evaluation of Korea's 20-Year ODA

  • Lee, Kye Woo,
  • Park, Gi Hoon

DOI
https://doi.org/10.23895/kdijep.2005.29.2.41
Journal volume & issue
Vol. 29, no. 2
pp. 41 – 74

Abstract

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This paper aims to assess the effectiveness of Korea's official development assistance (ODA) in terms of improvement in per capita gross domestic product (GDP) of aid recipients, and promotion of Korea's exports and outward foreign direct investments (FDI) to ODA recipients. The assessment has also been done for different groups of aid recipient countries divided by their regional location, income level, and economic freedom. For this purpose, this paper empirically tests the effectiveness of bilateral grants and loans for 163 aid recipient countries during the period of 1990 to 2003. Results show that ODA from Korea had not been able to explain the variations in aid recipient countries' growth in per capita GDP. Provision of aid promoted outward FDI to aid recipient countries during the entire period considered. With respect to exports, provision of aid had facilitated Korea's exports to aid recipient countries, except for the period of 2000~2003. On the basis of the findings, recommendations for future aid policy have been made.

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