The Impact Of The Aid Program On Poverty Reduction In Lao People's Democratic Republic

This study has examined to see the impact of the aid program on poverty reduction in Lao People's Democratic Republic.This relationship was interested since to graduate from the situation of Least Developing Countries by 2020 in concerning to attain the Millennium Development Goals(MDGs),a considerable amount of external assistance has been provided to fill the development gap in Lao PDR.The study applied the Autoregressive Distributed Lag(ARDL)estimation technique and using a time-series data from 1990-2016,saving-investment gap model has been employed to establish an association of the theoretical framework and the empirical study;the analysis of the contribution of the aid program on poverty reduction has combined other variables,which are grants aid,other aid comprised of loan aid and humanitarian aid,Foreign Direct Investment,government expenditure,domestic investment and remittance.The main findings are grants aid contributed to reduce poverty while other aid has a contribution to poverty positively.In the case study of Laos,both two types of aid have a long-term relationship to poverty and all the economic variables.More specifically,foreign direct investment,government expenditure and domestic investment,all have a negative significant impact on poverty expect remittance has relatedly positive impact to poverty which implies the insufficient of education level of migrant workers,it would limit the amount of remittance sending,leading to increase the poverty of their household.This study is not interested on the aid program and economic factors to reduce poverty alone but also considering the development to be sustainability in the further future of the Lao PDR.In overall,the consequences of study will enable Laos to understand more on the contribution of external assistance and take measures to make aid work more better on the improvement of growth and development as also to maintain the growth and eradicate poverty,this study suggests aid provides to education,health and infrastructure construction would improve the livelihood in disadvantaged districts and also in considering the advantage of country's geography by promoting the green development together with tourism and the improvement of investment policy.