The Effects of Bilateral and Multilateral Official Development Assistance on the Economic Growth of Vietnam

This study investigates the effects of bilateral and multilateral official development assistance (ODA) on Vietnam’s economic growth from 1986 to 2022. Employing the autoregressive distributed lag (ARDL) bounds testing approach, we find that in the short-run, bilateral ODA has a significantly positive effect on the economic growth whereas multilateral ODA has a significantly negative effect on the economic growth. However, the empirical findings reveal that both bilateral and multilateral ODA has no impact on the economic growth in the long-run. Moreover, the results obtained from error correction model (ECM) indicate that 86.53% of the deviation from the long-run equilibrium due to a shock in the current year will be adjusted back toward equilibrium in the next year.