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Determinants of Multilateral Official Development Assistance: Evidence from a Panel Study of Countries in Sub-Saharan Africa

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  • Hlavac, Marek
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    Abstract

    Countries in sub-Saharan Africa are some of the poorest and least developed in the world, with deplorable health and education levels. One way intended to promote better living standards in this region has been through development aid. This study examines the determinants of multilateral aid inflows to sub-Saharan Africa to determine whether it is directed to the least developed countries. I use panel data about 22 countries in sub-Saharan Africa from the 1995-2004 period to estimate a regression model in which I treat multilateral aid inflows as a proportion of GDP as the dependent variable, and proxies for health levels, education and institutional quality as explanatory variables. My analysis yields some evidence, especially in panel regressions with time-fixed effects, in support of the hypothesis that countries with poorer health and education levels receive more multilateral aid as a proportion of their gross domestic products. The corruption level, as measured by the International Country Risk Guide, however, appears to be an unimportant factor in the allocation of multilateral ODA.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 24243.

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    Date of creation: 2007
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    Handle: RePEc:pra:mprapa:24243

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    Keywords: foreign aid; health; education; development economics; sub-Saharan Africa;

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    1. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, Elsevier, vol. 12(9), pages 879-900, September.
    2. Subhayu Bandyopadhyay, 2006. "The Determinants of Aid in the Post-Cold War Era," Working Papers, Department of Economics, West Virginia University 06-14 Classification- JEL, Department of Economics, West Virginia University.
    3. 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.
    4. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, Springer, vol. 5(1), pages 33-63, March.
    5. Alesina, Alberto & Weder, Beatrice, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," Scholarly Articles 4553011, Harvard University Department of Economics.
    6. Rati Ram, 2003. "Roles of Bilateral and Multilateral Aid in Economic Growth of Developing Countries," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 56(1), pages 95-110, February.
    7. John Sender, 1999. "Africa's Economic Performance: Limitations of the Current Consensus," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 13(3), pages 89-114, Summer.
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