Global Journal of Economics and Business

Volume 13 - Issue 4 (1) | PP: 297 - 311 Language : العربية
DOI : https://doi.org/10.31559/GJEB2023.13.4.1
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The Impact of Foreign Debt and Aid on Public Expenditure in Jordan (1980-2019)

Sameh Asim Ajlouni ,
Farah Ibrahim Shehab
Received Date Revised Date Accepted Date Publication Date
23/4/2023 30/5/2023 19/6/2023 11/9/2023
Abstract
Objectives: This study aimed to analyze the impact of external borrowing and foreign aid on both types of government expenditure: the current and the capital expenditure in Jordan during the time period (1980-2019). Methods: Using the Autoregressive Distributed Lag model (ARDL). Results: The results showed that the effect of external borrowing on capital expenditure was negative in the long run while its effect was positive on current expenditure, but it was not statistically significant, while in the short run, the effect of external borrowing was positive and statistically significant on both capital and current expenditures. As for foreign aid, it had a positive and statistically significant impact on capital and current expenditure in the long and short term. Conclusions: The study recommended channeling the largest amount of external borrowing and foreign aid to capital expenditure through productive projects that develop the national economy, as well as increasing the reliance on local resources by focusing on national productivity and diversifying it to finance current expenditures. The paper also recommended controlling unjustified current expenditures and working to increase the share of capital expenditures.


How To Cite This Article
Ajlouni , S. A.& Shehab , F. I. (2023). The Impact of Foreign Debt and Aid on Public Expenditure in Jordan (1980-2019). Global Journal of Economics and Business, 13 (4), 297-311, https://doi.org/10.31559/GJEB2023.13.4.1

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