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Foreign Aid And Development: Looking Beyond The Growth Effect

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  • MOHAMMADOU NOUROU

    (The University of Ngaoundere, Cameroon)

Abstract

On the question of whether aid stimulates GDP growth, the profession provides inconclusive and often contradictory findings. While waiting for a stronger consensus, this paper analyzes the direct effect of aid on other non-monetary dimensions of development. I construct an index of social and human development similar to the UNDP¡¯s human development index but which differs from it by excluding per capita GDP. Using both non-parametric and parametric methods, I find a negative relationship between aid and social development. After controlling for per capita income, the econometric analysis suggests that higher dependence on foreign aid worsens social and human development.

Suggested Citation

  • Mohammadou Nourou, 2014. "Foreign Aid And Development: Looking Beyond The Growth Effect," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 99-115, December.
    • Handle: RePEc:jed:journl:v:39:y:2014:i:4:p:99-115
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    References listed on IDEAS

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    Cited by:

    1. Hassan, Sherif, 2016. "Seventy Years of Official Development Assistance: Reflections on the Working Age Population," MPRA Paper 74835, University Library of Munich, Germany.
    2. Sakiru Oladele Akinbode & Tobi Michael Bolarinwa, 2020. "Effect of Foreign Aid on Human Development in Sub-Saharan Africa:A System GMM Approach," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 18(1), pages 19-38.
    3. Kar, Ashim Kumar, 2016. "Aid and Human Development: Is There A Role for Good Policy Environment?," MPRA Paper 95433, University Library of Munich, Germany, revised 2018.
    4. Ngoura Ndjidda & Ngo Bilong Adèe Amoa & Mohammadou Nourou, 2022. "Agricultural Growth in Cameroon: What Effects of Official Development Assistance Financing? [Croissance Agricole au Cameroun : Quels effets du financement de l'Aide Publique au Développement ?]," Post-Print hal-03858915, HAL.
    5. Lis, Piotr, 2018. "The impact of armed conflict and terrorism on foreign aid: A sector-level analysis," World Development, Elsevier, vol. 110(C), pages 283-294.
    6. Sherif M. Hassan, 2020. "Revisiting the Development Impact of Sectorally Disaggregated Foreign Aid," Poverty & Public Policy, John Wiley & Sons, vol. 12(2), pages 123-149, June.

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    More about this item

    Keywords

    Aid; Social Development; Human Development;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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