A STUDY ON IMPACT OF FOREIGN AID ON HUMAN DEVELOPMENT OF ASIAN COUNTRIES: WITH QUANTILE REGRESSION APPROACH

Abstract

In this study, we will examine how foreign aid has affected the human development indexes of Asian countries. The HDI and its three indicators—the income, health, and education indices—have been employed for this purpose. While studying data across 34 Asian nations between 2000 and 2019, we used the quantile regression approach. Our findings indicate that foreign aid and human development in Asian countries are positively correlated and that this correlation is especially strong in those with low human development indices. In the meantime, statistical analysis reveals a positive correlation between foreign aid and HDI and its three indicators: income, health, and education. In conclusion, our results indicate that foreign aid has a favorable effect on the HDI, income index, health index, and education index. As a result, the HDI is the most comprehensive metric for gauging each country's progress toward human development. Consequently, our findings show that foreign aid is necessary for enhancing human development.