International Journal of Innovative Research and Development

Abstract

Debate over the effectiveness of foreign aid is a great concern to the aid-receiving countries. Empirical studies using multi-country data shows mixed results while studies with single country data reveal positive impact of aid. Bhutan accepts foreign aid to finance development requirements due to lack of domestic savings and petty export earnings. This paper focuses on the effectiveness of foreign grants in case of the economy of Bhutan. Statistical analysis of time-series data, fitting a vector auto-regression (VAR) model, shows that external aid in Bhutan is effective in raising income as well as domestic savings. Granger causality tests too show similar results.  Notwithstanding the primacy of self-reliance in Bhutan’s development philosophy, foreign aid might play a significant role for development in Bhutan, at least for the time being. 

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Abstract

To resolve the inadequacy of state mechanism, it is understandable that a large number of citizens have considers the civil society as a way to enhance public participation, consultation, transparency and accountability in governance. Thinking a positive note of the civil society as a promoter of democratic form of governance, we may identify several areas where civil society could advance democracy. Civil society has generally helped to give convenient path to the functioning of democracy through increasing citizen participation in policy making process, enhance the state’s accountability to its citizenry and provide civic education.

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