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Can aid stimulate productivity in Sub-Saharan Africa? A dynamic panel approach

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  • Świerczyńska, Katarzyna
  • Kliber, Agata

Abstract

The aim of the study was to examine the impact of the official development aid (ODA) on productivity in Sub-Saharan Africa. As development policies embrace different types of aid interventions, we decomposed aid by type of flows and analysed their relations with 24 African states’ productivity (measured by total factor productivity) over the period 1995-2014. Results of the dynamic panel model estimation reveal important implications for the development cooperation policy agenda. It appears that although total value of ODA does not support productivity, technical aid disbursements are associated with higher total factor productivity. This implies that the implementation of technical cooperation enables absorption of technology and contributes to the increase of technology development in recipient Sub-Saharan African countries. The results are fairly robust. Moreover, in this study we confirm that low infrastructure development and shortages in primary education are associated with lower productivity, while trade openness, development of financial market, and political stability - with higher productivity values.

Suggested Citation

  • Świerczyńska, Katarzyna & Kliber, Agata, 2019. "Can aid stimulate productivity in Sub-Saharan Africa? A dynamic panel approach," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 15(1).
    • Handle: RePEc:ags:pdcbeh:301133
    DOI: 10.22004/ag.econ.301133
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    File URL: https://ageconsearch.umn.edu/record/301133/files/201904190431_10_BEH_2019_Vol15_Issue1_Swierczynska_and_Kliber_Can_aid_stimulate_productivity_Sub-Saharan_Africa_158-186.pdf
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    Cited by:

    1. Miao Miao & Jiang Yushi & Dinkneh Gebre Borojo, 2020. "The Impacts of China–Africa Economic Relation on Factor Productivity of African Countries," Economies, MDPI, vol. 8(2), pages 1-30, June.

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    Keywords

    Productivity Analysis;

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