THE DYNAMIC VARIABILITY OF FOREIGN

AID FOR PAKISTAN

BY
Bilal Ahmad
RESEARCH QUESTION
To test the proposition that Gross Domestic
Product, Tariff Rates adaptability and Inflation rate
has a significant/insignificant relation with Foreign
Assistance.
RELEVANCE OF RESEARCH QUESTION
 Relationship between Foreign Aid and Gross
Domestic Product.
OPERATIONAL DEFINITION
 Tariff rates
 Dutch Disease (negative consequences in

large increase of any thing)

 Volatility in consumption and investment
 What will this thesis unleash ?
MOTIVATION
 Why has foreign financial assistance had
become a major variable to run this country.
 Therefore, foreign aid becoming the centre of

attention.
RESEARCH METHADOLOGY
 Nature of research type. (quantitative)
 Data type.(secondary)
 Research period.
limitations
Theoretical Framework
RESEARCH HYPOTHESIS
1) Ho: To test the Hypothesis that Gross Domestic Product has an
significant relation with Foreign Aid.
H1: To test the Hypothesis that Gross Domestic Product has not a
significant relation with consumer Foreign Aid.

2) Ho: To test the Hypothesis that Tariff Rates have an insignificant

relation with Foreign Aid.
H1: To test the Hypothesis that Tariff Rates have a significant relation
with Foreign Aid.

3) Ho: To test the Hypothesis that Inflation Rates have an insignificant

relation with Foreign Aid.
H1: To test the Hypothesis that Inflation Rates have a significant
relation with Foreign Aid.
TECHNIQUES
 My sampling techniques are Convenience sampling and
Snow Ball Sampling.
 Convenience Sampling: The Sampling procedure used to

obtain those units or people most conveniently available.

 Snow Ball Sampling: A sampling procedure in which initial

respondents are selected by probability methods and

additional respondents are obtained from the information
provided by the initial respondents.
 Snow ball sampling techniques is used so that sample size

and costs can be reduced, where as convenience sampling

is used so that large number of completed questionnaires
can be obtained quickly and economically.
RESULTS
Dependent variable: F.AID
-----------------------------------------------------------------------------
Standard T
Parameter Estimate Error Statistic P-Value
-----------------------------------------------------------------------------
CONSTANT -3.20046E9 7.71484E8 -4.14845 0.0060
GDP 0.000956376 0.0001775 5.3868 0.0017
INFLATION -3.82561E7 2.19016E7 -1.74672 0.1313
TARIFF 1.08015E7 8.37467E6 1.28979 0.2446
-----------------------------------------------------------------------------
 

Analysis of Variance
-----------------------------------------------------------------------------
Source Sum of Squares Df Mean Square F-Ratio P-Value
-----------------------------------------------------------------------------
Model 1.89225E18 3 6.3075E17 15.64 0.0031
Residual 2.42005E17 6 4.03342E16
-----------------------------------------------------------------------------
Total (Corr.) 2.13425E18 9

 
 
R-squared = 88.6609 percent
R-squared (adjusted for d.f.) = 82.9914
percent
Standard Error of Est. = 2.00834E8
Mean absolute error = 1.18549E8
Durbin-Watson statistic = 1.57117
 The output shows the results of fitting a
multiple linear regression model to describe
the relationship between Foreign Aid and 3
independent variables. The equation of the
fitted model is
 Foreign AID = -3.20046E9 +

0.000956376*GDP - 3.82561E7*INFLATION
+ 1.08015E7*TARIFF
 Foreign Aid with respect to Gross Domestic
Product
 A significant relationship exists between

Foreign Aid with respect to Gross Domestic

Product. The p value is 0.0017 i.e. less than
0.10 which means that there is a significant
relation ship between the two variables. The t
value is 0.0001775 which also lie in the critical
region. Hence we can say that there is a
significant relationship between these two
variables.
 Foreign aid with respect to INFLATION.
 According to the results of the regression

analysis the p value for customer service

orientation came out to be 0.1313 which is
more than 0.10 which proves the fact true
that there is no significant relationship
between consumer foreign aid and inflation.
Then the t value came out to 2.19016 which
also again show the insignificant relationship
between the two variables.
Foreign aid with respect to Tariff Rates
According to the multiple regression models
the p value is 0.2446
which is again more than 0.10 which shows
that there is no significant relationship
between foreign aid and tariff rates. The t
value is also 8.37467 which again lie in the
rejection region which shows that there is a
negative relationship between these two
variables.