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Is Aid Really Dead? Evidences from Sub-Saharan Africa

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  • Ogundipe, Adeyemi
  • Ogundipe, Oluwatomisin

Abstract

This study examined the relationship between foreign aid and economic development in Sub Saharan Africa. The study seeks to examine the role of institutions in aid effectiveness in SSA countries by adopting a theoretical framework similar to the Endogenous/New Growth model and the System Generalized Method of Moments (GMM) technique of estimation in order to overcome the challenge of endogeneity perceived in the institution variables and Aid-Growth argument. It was observed that foreign aid does not significantly influenced Real GDP Per Capita in Sub-Saharan Africa, even after controlling for adequate rule of law and sound public institutions. In the same manner; capital stock, rule of law, control of corruption and Human capital enhanced economic performance while foreign aid failed to contribute meaningfully to economic development in SSA Countries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 51694.

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Date of creation: 24 Nov 2013
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Handle: RePEc:pra:mprapa:51694

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Keywords: Foreign aid; Economic Development; Institutions; System GMM;

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  1. Dollar, David & Alesina, Alberto, 2000. "Who Gives Foreign Aid to Whom and Why?," Scholarly Articles 4553020, Harvard University Department of Economics.
  2. David Fielding, 2010. "Aid and Dutch Disease in the South Pacific and in Other Small Island States," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 46(5), pages 918-940.
  3. Ogundipe, Adeyemi & Amaghionyeodiwe, Lloyd, 2013. "Transnational Trade In Ecowas: Does Export Content Matter?," MPRA Paper 51617, University Library of Munich, Germany.
  4. Arndt Channing & Jones Sam & Tarp Finn, 2010. "Aid, Growth, and Development: Have We Come Full Circle?," Journal of Globalization and Development, De Gruyter, De Gruyter, vol. 1(2), pages 1-29, December.
  5. Martin Mühleisen & Dhaneshwar Ghura & Roger Nord & Michael T. Hadjimichael & E. Murat Ucer, 1995. "Sub-Saharan Africa," IMF Occasional Papers 118, International Monetary Fund.
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