27 1960 2008 used ardl and they concluded that under

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27 (1960-2008) used ARDL, and they concluded that under sound macroeconomic policies, both bilateral and multilateral aid spurred economic growth. In addition, there are several studies that examined other influences, such as the general standard of living and politics. Feeny, McGillivray, and White (2004) focused on poverty reduction on an organisational level; they found that multilateral assistance was concentrated more on poverty. Through a theoretical analysis of the aid flow to Sub-Saharan Africa, Abuzeid (2009) believed that the multilateral agencies should not discriminate against corruption in particular countries, and the aid from the IMF and the WB was problematic in effectiveness. Furthermore, some other studies focused on the future trends of multilateral and bilateral aid. The North-South Institute (2011) concluded that: (a).the emerging powers and globalisation accreted potential risks; (b).South-South cooperation turned out to be more important; (c).economic orders were changing; (d).transparency, effectiveness, and risk management were important; (e).for traditional donors, if they wanted to maintain competitiveness, then they needed to further consider the aid’s conjunction with other instruments (trade, skills, etc.). Similar conclusions were made by Besada and Kindornay (2011), who believed that: New actors are (re)emerging, such as the BRICs and the private sector, presenting new challenges and opportunities for multilateral development cooperation…The international community should agree on a transparent and universally applied standardized multilateral evaluation and assessment framework to help reduce duplication and increase the effectiveness of the multilateral development cooperation system (p.22-23). From the literature above, I cannot conclude whether or not foreign aid promotes economic growth. But when separating foreign aid into bilateral aid and multilateral aid, it is more likely that bilateral aid performs better than multilateral aid in effectiveness. In addition, there is a trend that aid donated by developing countries (South-South assistances) is increasing. Since the current international organisations (the United Nations [UN], the IMF, the WB, the OECD, etc.) and the NDB are all multilateral aid agencies, the policy indications in Chapter 5 will mainly focus on multilateral aid. 2.6 External debt and economic growth The Debt Laffer Curve as a theory was first introduced by Sachs (1989), and Krugman (1989) perfected the logic behind it. According to the theory, external debt could have a positive impact on investment and growth (upward sloping), but if a country borrowed too much, when surpassing a certain endogenous threshold of level of debt, then this might result in efficiency losses (downward sloping). Sun, Xuan, and Yan (2012) detected the relationship between debt transformation rates. They concluded that if the rate was too low, an asset bubble might be generated, which would cause crises, while if it was too high, the equilibrium capital level would

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