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A Regional Perspective on Aid and FDI in Southern Africa

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  • Henri Bezuidenhout

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Abstract

During the last decade international aid flows diminished while Africa’s relative share of global foreign direct investment (FDI) declined. This went together with lacklustre growth and low human development levels. In 2005, the G8 countries announced that they would increase aid to Africa by some $25 billion per annum. The pledge for increasing aid seems to have triggered an extensive debate about the role of aid and other international capital flows in the development of poorer countries. This study contributes to this debate. Specifically it addresses the role of foreign direct investment and aid to growth and human development. Panel estimations are used to determine the relationships between aid, FDI and growth in the Southern Africa region from 1990 to 2005. Negative relationships are found between FDI and growth while aid and growth turned out to be unrelated.

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Bibliographic Info

Article provided by Springer in its journal International Advances in Economic Research.

Volume (Year): 15 (2009)
Issue (Month): 3 (August)
Pages: 310-321

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Handle: RePEc:kap:iaecre:v:15:y:2009:i:3:p:310-321

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Web page: http://www.springerlink.com/link.asp?id=112112

Related research

Keywords: Foreign direct investment (FDI); Aid; SACU; SADC; South Africa; Growth; Human capital development; Regional integration; F15; F21; F35; O15; O19;

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References

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  1. Sebnem Kalemli-Ozcan & Laura Alfaro & Selin Sayek & Areendam Chanda, 2002. "FDI and Economic Growth: The Role of Local Financial Markets," Macroeconomics 0212007, EconWPA.
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Cited by:
  1. Hasanat Shah, Syed & He, Bin & Li, Junjiang, 2011. "The Causality and Economic Impact of FDI inflows from Trade Partners in Pakistan," MPRA Paper 35645, University Library of Munich, Germany.
  2. Khan, Shiraz & Mehboob, Farhan, 2014. "Impact of FDI on GDP: An Analysis of Global Economy on Production Function," MPRA Paper 55352, University Library of Munich, Germany.
  3. Carike Claassen & Elsabé Loots & Henri Bezuidenhout, 2011. "Chinese Foreign Direct Investment in Africa," Working Papers 261, Economic Research Southern Africa.

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