Abstract
The analysis of the impact of foreign aid on economic development, suggest that poor countries have to relay on the foreign aid as a resource to fill the deficit. There are many form of foreign resources like Foreign Direct Investment (FDI), External Loans and Credit, Technical Assistance, Project and non Project Aid and many other forms. But most of under developed countries where Jordan one of them don't have the investment friendly situation. So in one way or the other have to relay on foreign aid and debt rather than other form of financial foreign resources. This study analyses the trend and impact of foreign aid on the economic development of Jordan during the period 1990-2005 using for this purpose different statistical techniques. From the analysis of the related data of Jordan it is clear that the foreign capital flow has a direct impact on the economic development of Jordan.
Highlights
Jordan is a small country with few natural resources, its economic and social wellbeing have been intricately tied to its relations with neighboring Arab countries in term of population movement and flow of trade and financial aid
This study attempts to analyze the effectiveness of the foreign aid in economic development in Jordan during the period 1990-2005 using for this purpose different statistical techniques
The present study shows a positive effect of the foreign capital inflow on the economic development
Summary
Jordan is a small country with few natural resources, its economic and social wellbeing have been intricately tied to its relations with neighboring Arab countries in term of population movement and flow of trade and financial aid. US $ 2533 in year 2005, Jordan is classified as a lower middle income economy. The under developed countries like Jordan are entrapped in a vicious circle of poverty. The saving ratios remain low, resulting in low investment levels. Due to low income the taxable capacity remains lower, i. In such situations the underdeveloped countries have to face saving investment deficit as well as the deficit in the balance of payment. The two- gap model suggests that developing countries have to rely on the foreign capital inflow to fill these two gaps: The import-export gap and the saving investment gap[1]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
