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The Devil is in the Details: On the Robust Determinants of Development Aid in G5 Sahel Countries

Author

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  • Nimonka Bayale

    (Economic Studies and Regional Integration Directorate)

  • Brigitte Kanga Kouassi

    (University of Kara)

Abstract

This paper introduces model uncertainty into the empirical study on the determinants of development aid at the regional level. This is done by adopting a panel Bayesian model averaging approach applied on the data of G5 Sahel countries, spanning the period 1980–2018. Our results suggest that among the regressors considered, those reflecting terrorist attacks, trade stakes including military expenditure, socioeconomic prospects and institutional conditions tend to receive high posterior inclusion probabilities. Then, the study explores the relationship between these regressors and foreign aid by employing the fully modified ordinary least squares (FMOLS), the continuously updated fully modified (CUP-FM), the dynamic ordinary least squares (DOLS) long-run estimators and the Dumitrescu and Hurlin’s (2012) panel causality test. Results highlight three concerns that may justify aid flows toward G5 Sahel countries: (a) peace and security purposes, (b) economic interest of donors and (c) recipient economic needs. The paper recommends that the Sahel countries should strengthen international cooperation for security and peace in compliance with the goal 16 of the 2030 Agenda for sustainable development of the United Nations (UN) and the goal 13 of the African Union’s (AU) Agenda 2063.

Suggested Citation

  • Nimonka Bayale & Brigitte Kanga Kouassi, 2022. "The Devil is in the Details: On the Robust Determinants of Development Aid in G5 Sahel Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(4), pages 646-680, December.
    • Handle: RePEc:pal:compes:v:64:y:2022:i:4:d:10.1057_s41294-021-00182-z
    DOI: 10.1057/s41294-021-00182-z
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    2. Milly Chepkorir Chebochok & Nimonka Bayale, 2023. "Effects of financial inclusion on tax revenue mobilization: Evidence from WAEMU countries," African Development Review, African Development Bank, vol. 35(2), pages 226-238, June.

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    More about this item

    Keywords

    Bayesian model averaging; Foreign aid; Instability; Security and Peace; G5 Sahel;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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