Foreign Aid and Economic Growth in Vietnam: Empirical Study and Policy Implications

Nguyen Hoang Quy

Abstract


This paper studies the impact of foreign aid on Vietnam economic growth. By analyzing Vietnam statistical data, the research results show a negative relationship between foreign aid and economic growth of Vietnam. The main reason may be due to wrong and ineffective usage of this aids, and also corruption in the country. On these basis, we propose some recommendations for improving the performance of aid usage by strictly managing and reasonably allocating aid fund. Accordingly, Vietnam Government should improve the State’s management capacity by implementing decentralized administration in a clear and transparent manner; by simplifying procedures; by improving aid-funded project appraisal; and by ensuring an independence of foreign aids.


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DOI: http://dx.doi.org/10.5539/par.v5n2p53

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