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Aid Categories that Foster Pro-Poor Growth: The Case of Sierra Leone

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  • Philip Michael Kargbo
  • Kunal Sen

Abstract

type="main" xml:lang="en"> This paper examines the effect of different categories of foreign aid on poverty reduction. It uses a country case study for Sierra Leone to explore the impact of different aid types on pro-poor growth as a dimension of poverty reduction. Using annual time series data spanning from 1970 to 2007 and employing the bounds test approach to cointegration by Pesaran and Shin ([Pesaran, H. M., 1999]), the study finds strong evidence to suggest that only aid in the form of grants do have a pro-poor effect. This result is more obvious in the long run than in the short run. Aid in the forms of loans and technical assistance could not prove signficant for fostering pro-poor growth in the country. Thus, even though total aid reveals a highly significant long-run impact in improving pro-poor growth in Sierra Leone, when disaggregated, only aid in the form of grants shows strong evidence of reducing poverty in the country. The implication of these findings is that for reducing poverty in typically poor and fagile states, aid in the form of grants should be encouraged. The increasing donor interest in technical assistance aid in recent years should be reconsidered as there is no strong evidence that it reduces poverty.

Suggested Citation

  • Philip Michael Kargbo & Kunal Sen, 2014. "Aid Categories that Foster Pro-Poor Growth: The Case of Sierra Leone," African Development Review, African Development Bank, vol. 26(2), pages 416-429, June.
  • Handle: RePEc:bla:afrdev:v:26:y:2014:i:2:p:416-429
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    Cited by:

    1. Asongu, Simplice & Efobi, Uchenna & Beecroft, Ibukun, 2015. "FDI, Aid, Terrorism: Conditional Threshold Evidence from Developing Countries," EconStor Preprints 114569, ZBW - German National Library of Economics.
    2. Simplice Asongu & Oasis Kodila-Tedika, 2017. "Trade, aid and terror," International Journal of Development Issues, Emerald Group Publishing, vol. 16(1), pages 2-24, April.
    3. Simplice Asongu & Mohamed Jellal, 2016. "Foreign Aid Fiscal Policy: Theory and Evidence," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(2), pages 279-314, June.
    4. Asongu Simplice & Jacinta C. Nwachukwu, 2015. "Foreign aid instability and bundled governance dynamics in Africa," Working Papers 15/058, African Governance and Development Institute..
    5. Simplice A. Asongu & Jacinta C. Nwachukwu, 2018. "Increasing Foreign Aid for Inclusive Human Development in Africa," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(2), pages 443-466, July.
    6. Asongu, Simplice & Nwachukwu, Jacinta, 2015. "Foreign aid volatility and lifelong learning: demand-side empirics to a textual literature," MPRA Paper 67853, University Library of Munich, Germany.
    7. Simplice Asongu, 2014. "A brief clarification to the questionable economics of foreign aid for inclusive human development," Working Papers 14/028, African Governance and Development Institute..
    8. Asongu, Simplice & Tchamyou, Vanessa, 2015. "Foreign aid, education and lifelong learning in Africa," MPRA Paper 70240, University Library of Munich, Germany.
    9. repec:bla:afrdev:v:29:y:2017:i:3:p:389-402 is not listed on IDEAS
    10. repec:bla:socsci:v:98:y:2017:i:1:p:282-298 is not listed on IDEAS
    11. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Foreign Aid and Inclusive Development: Updated Evidence from Africa, 2005–2012," Social Science Quarterly, Southwestern Social Science Association, vol. 98(1), pages 282-298, March.
    12. repec:bla:afrdev:v:29:y:2017:i:2:p:184-196 is not listed on IDEAS

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