Institutes of Distributing and Absorbing Official Development Assistance in Ethiopia

The paper analyzes the flows of Official Development Assistance (ODA) into Ethiopia. The study is structured along two primary dimensions: by donor countries and by recipient sectors within the Ethiopian economy. Particular attention is paid to emerging donors – primarily members of BRICS – and traditional ODA-providing organizations, as well as to the opportunities for the rational utilization of these funds to improve the living standards of the local population. The research investigates the interdependence between incoming foreign ODA and its role as a factor in Ethiopia’s economic growth. A developed econometric model with a time lag incorporates factors of Ethiopia’s institutional environment – such as political stability, the quality of governance, and corruption mitigation – in relation to achieving economic growth targets. The findings indicate a correlation between the quality of Ethiopia’s economic institutions and the volume of incoming ODA. However, the subsequent absorption of this assistance remains ambiguous due to corruption and the misallocation of incoming foreign financial resources.