Despite receiving large quantities of aid, many developing countries, especially the Least Developed Countries, have remained stagnant and became more aid-dependent. This grim reality provokes vigorous debate on the effectiveness of aid. This study re-examines the effectiveness of aid, focusing on the ongoing debate on the interactive effect of aid and policy conditionality on sustainable economic growth. A theoretical model of the aid-growth nexus was developed to explain why policy conditionality attached to aid may not always promote sustainable economic growth. Noticeable methodological weaknesses in the aid fungibility and aid-growth models have led to the construction of two macroeconometric models to tackle and reduce these weaknesses. The Lao People's Democratic Republic's economy for the 1978-2001 period has been used for a case study.It is argued that the quality of policy conditionality and the recipient country's ability to complete specified policy conditions are the main factors determining the effectiveness of aid. Completing the policy prescriptions contributes to a stable aid inflow. The aid-growth nexus model developed in this study shows that stable and moderate aid inflow boosts economic growth even when aid is fungible. However, failure to complete the policy conditionality owing to inadequate policy design and problems of policy mismanagement caused by lack of state and institutional capability in the recipient country triggers an unstable aid inflow. The model shows that unstable aid flows reduce capital accumulation and economic growth in the recipient country. These empirical findings reveal that policy conditionality propagated through the "adjustment programmes" has mitigated the side effects of aid fungibility and "Dutch disease" in the case of the Lao PDR. Preliminary success in implementing the policy conditions in the pre-1997 period led to a stable aid inflow and contributed to higher economic growth. This favourable circumstance, however, was impaired by unstable aid flow in the post-1997 period. The lack of state and institutional capacity in the Lao PDR and the inadequate policy design to deal with external shocks triggered the instability of aid inflow, which in turn exacerbated the negative effects of the Asian financial crisis on the Lao PDR's economy.

Concerns the Hmong people in the Lao People's Democratic Republic and the Turkmens in Iraq. / UN Job no.: G0511801 E. Material type: NGO written statements. Issued under agenda item 6, agenda document E/CN.4/2005/1. Issued under agenda item 6a, agenda document E/CN.4/2005/1.

Using vignette experiments, this thesis examines individuals’ decision-making in various social dilemmas. A case study of littering behavior amongst university students in Lao People's Democratic Republic is used to investigate whether individual preferences are stable across littering dilemmas and other social dilemmas. This study further investigates if a visual prompt can encourage prosocial behavior in littering situations. The results show that behavior in social dilemmas is dependent on individual preferences. Additionally, the study finds little evidence that visual prompts could be used in order to efficiently decrease littering in Laos. However, a negative relationship is found between littering behavior and knowledge regarding the consequences of littering. These findings indicate that policy makers could use knowledge increasing campaigns in order to increase prosocial decision making regarding littering. Yet, further studies are needed in order to validate the results. Lastly, we also find differences in what influence littering behavior, depending on the item being littered.

Even though the idea of microcredit is to stimulate entrepreneurial activities in developing countries, there is an ongoing debate whether this is achieved. Many argue that only providing credit is not enough and see a need for additional components in promoting entrepreneurial activities for the stimulation of economic growth. Moreover, the importance of including women in economic development is widely acknowledged. In Lao People's Democratic Republic where many women run their own businesses and a majority of microcredit borrowers are women, we aimed to examine the relation between microcredit and female entrepreneurship. This was accomplished by conducting semi-structured interviews with 13 Laotian female microcredit borrowers running businesses, as well as interviews with seven representatives from organizations related to microcredit and female entrepreneurship. To understand the female entrepreneurs and the environment in which they operate, we developed a model where factors related to the loan agreement, networking, motivation, gender division of labor and training were identified as important components in the context of Lao PDR. The results support the view that a credit only approach is not enough for the development of female entrepreneurship in Lao PDR.