Advanced Search
MyIDEAS: Login to save this paper or follow this series

Consult your gods: the questionable economics of development assistance in Africa

Contents:

Author Info

  • Asongu Simplice

    ()
    (Yaoundé/Cameroun)

Abstract

This paper assesses the aid-development nexus in 52 African countries using updated data (1996-2010) and a new indicator of human development (adjusted for inequality). The effects of Total Net Official Development Assistance (NODA), NODA from the Development Assistance Committee (DAC) and NODA from Multilateral donors on economic prosperity (at national and per capita levels) are also examined. The findings broadly indicate that development assistance is detrimental to GDP growth, GDP per capita growth and inequality adjusted human development. The magnitude of negativity (which is consistent across specifications and development dynamics) is highest for NODA from Multilateral donors, followed by NODA from DAC countries. Given concerns on the achievement of the MDGs, the relevance of these results point to the deficiency of foreign aid as a sustainable cure to poverty in Africa. Though the stated intents or purposes of aid are socio-economic, the actual impact from the findings negates this. It is a momentous epoque to solve the second tragedy of foreign aid; it is high time economists and policy makers start rethinking the models and theories on which foreign aid is based. In the meantime, it is up to people who care about the poor to hold aid agencies accountable for piecemeal results. Policy implications and caveats are discussed.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.afridev.org/RePEc/agd/agd-wpaper/Consult-your-gods.-The-questionable-economics-of-development-assistance-in-Africa.pdf
File Function: Revised version, 2013
Download Restriction: no

Bibliographic Info

Paper provided by African Governance and Development Institute. in its series Working Papers with number 13/002.

as in new window
Length: 41
Date of creation: 20 Jul 2013
Date of revision:
Handle: RePEc:agd:wpaper:13/002

Contact details of provider:
Email:
Web page: http://www.afridev.org/index.php/en/
More information through EDIRC

Related research

Keywords: Foreign Aid; Political Economy; Development; Africa;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Simplice A., Simplice, 2011. "Why do French civil-law countries have higher levels of financial efficiency?," MPRA Paper 33950, University Library of Munich, Germany.
  2. Okada, Keisuke & Samreth, Sovannroeun, 2012. "The effect of foreign aid on corruption: A quantile regression approach," Economics Letters, Elsevier, Elsevier, vol. 115(2), pages 240-243.
  3. Filmer, Deon & Hammer, Jeffrey S & Pritchett, Lant H, 2000. "Weak Links in the Chain: A Diagnosis of Health Policy in Poor Countries," World Bank Research Observer, World Bank Group, World Bank Group, vol. 15(2), pages 199-224, August.
  4. Simplice A, Asongu, 2012. "Government quality determinants of stock market performance in African countries," MPRA Paper 39631, University Library of Munich, Germany.
  5. Asongu, Simplice A, 2013. "On the effectiveness of foreign aid in institutional quality," MPRA Paper 46649, University Library of Munich, Germany.
  6. Minoiu, Camelia & Reddy, Sanjay G., 2010. "Development aid and economic growth: A positive long-run relation," The Quarterly Review of Economics and Finance, Elsevier, Elsevier, vol. 50(1), pages 27-39, February.
  7. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 847-868, September.
  8. Asongu Simplice, 2012. "The political economy of development assistance: peril to government quality dynamics in Africa," Working Papers, African Governance and Development Institute. 12/008, African Governance and Development Institute..
  9. Asongu Simplice, 2011. "How would population growth affect investment in the future? Asymmetric panel causality evidence for Africa," Working Papers, African Governance and Development Institute. 11/002, African Governance and Development Institute..
  10. William Easterly, 2002. "What did Structural Adjustment Adjust? The Association of Policies and Growth with Repeated IMF and World Bank Adjustment Loans," Working Papers, Center for Global Development 11, Center for Global Development.
  11. Paul Mosley & John Hudson & Sara Horrell, 1992. "Aid, the public sector and the market in less developed countries: A return to the scene of the crime," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 4(2), pages 139-150, 03.
  12. J.A. Agbor & J. W. Fedderke & N. Viegi, 2010. "How Does Colonial Origin Matter for Economic Performance in sub-Saharan Africa?," Working Papers, Economic Research Southern Africa 176, Economic Research Southern Africa.
  13. Svensson, Jakob, 2000. "Foreign aid and rent-seeking," Journal of International Economics, Elsevier, Elsevier, vol. 51(2), pages 437-461, August.
  14. Murphy, Kevin M. & Shleifer, Andrei & Vishny, Robert W., 1989. "Industrialization and the Big Push," Scholarly Articles 3606235, Harvard University Department of Economics.
  15. Beck, T.H.L. & Demirgüç-Kunt , A. & Levine, R., 2003. "Law and finance: Why does legal origin matter?," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-3125511, Tilburg University.
  16. Tony Addison & George Mavrotas & Mark McGillivray, 2005. "Development assistance and development finance: evidence and global policy agendas," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 17(6), pages 819-836.
  17. Easterly, William, 1999. "The ghost of financing gap: testing the growth model used in the international financial institutions," Journal of Development Economics, Elsevier, Elsevier, vol. 60(2), pages 423-438, December.
  18. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, Elsevier, vol. 40(2), pages 289-329, February.
  19. Asongu Simplice, 2012. "Globalization and Africa: implications for human development," Working Papers, African Governance and Development Institute. 12/022, African Governance and Development Institute..
  20. Patrick GUILLAUMONT & Lisa CHAUVET, 1999. "Aid and Performance: A Reassessment," Working Papers 199910, CERDI.
  21. Fielding, David & McGillivray, Mark & Torres, Sebastian, 2006. "A Wider Approach to Aid Effectiveness: Correlated Impacts on Health, Wealth, Fertility and Education," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2006/23, World Institute for Development Economic Research (UNU-WIDER).
  22. Antonio R. Andrés & Simplice A. Asongu, 2012. "Fighting software piracy: Which governance tools matter in Africa?," Development Research Working Paper Series, Institute for Advanced Development Studies 10/2012, Institute for Advanced Development Studies.
  23. Simplice A, Asongu, 2012. "On the effect of foreign aid on corruption," MPRA Paper 36545, University Library of Munich, Germany.
  24. William Easterly & Ross Levine & David Roodman, 2003. "New Data, New doubts: A Comment on Burnside and Dollar's "Aid, Policies, and Growth" (2000)," NBER Working Papers 9846, National Bureau of Economic Research, Inc.
  25. René M. Stulz, 1999. "Golbalization, Corporate Finance, And The Cost Of Capital," Journal of Applied Corporate Finance, Morgan Stanley, Morgan Stanley, vol. 12(3), pages 8-25.
  26. Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross-Country Empirical Tests," Southern Economic Journal, Southern Economic Association, Southern Economic Association, vol. 68(2), pages 310-329, October.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:agd:wpaper:13/002. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Asongu Simplice).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.