The impact of grants and aid on economic growth in Palestine

Abstract

This study aimed to measure the impact of Grants and aid on Economic growth in Palestine over the period 1996–2023. Employing a quantitative approach, the study utilized regression equations and econometric models to assess the effects of budget support grants, development project grants, and total revenues on Palestinian economic growth, using the E-views (V12) software. The findings revealed a positive relationship between budget support grants and total revenues with economic growth, while an inverse relationship was observed between development project grants and economic growth. Furthermore, budget support grants and total revenues exhibited a statistically significant positive impact on economic growth, whereas development project grants showed no significant effect. Based on these results, the study recommends establishing a framework to evaluate the performance of grant-funded projects, emphasizing economic impact indicators such as job creation and GDP growth. It also advocates for enhanced transparency and accountability in project management. In the long term, reducing reliance on grants through strategies like improving tax collection is essential to bolster economic independence and shield growth from external funding volatility