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Aid Flows and Growth Diagnosis: Empirical Evidence for A Panel of ECOWAS Countries


  • P. B. Eregha

    () (University of Lagos, Akoka,Lagos, Nigeria.)


This article investigates if the stability of aid flows has an impact on investment and economic growth for the Economic Community of West African States (ECOWAS) countries using pooled panel regression from 1970-2008. The results suggest that foreign aid has a positive and significant impact on investment, but a negative impact on economic growth. The uncertainty variable has a negative and statistically significant impact on both economic growth and investment

Suggested Citation

  • P. B. Eregha, 2013. "Aid Flows and Growth Diagnosis: Empirical Evidence for A Panel of ECOWAS Countries," Economics Bulletin, AccessEcon, vol. 33(4), pages 2627-2633.
  • Handle: RePEc:ebl:ecbull:eb-13-00682

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    References listed on IDEAS

    1. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    2. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    3. Papanek, Gustav F, 1973. "Aid, Foreign Private Investment, Savings, and Growth in Less Developed Countries," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 120-130, Jan.-Feb..
    4. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    5. Simon Feeny, 2005. "The Impact of Foreign Aid on Economic Growth in Papua New Guinea," Journal of Development Studies, Taylor & Francis Journals, vol. 41(6), pages 1092-1117.
    6. Chatterjee, Santanu & Turnovsky, Stephen J., 2007. "Foreign aid and economic growth: The role of flexible labor supply," Journal of Development Economics, Elsevier, vol. 84(1), pages 507-533, September.
    7. Stoneman, Colin, 1975. "Foreign capital and economic growth," World Development, Elsevier, vol. 3(1), pages 11-26, January.
    8. Georgios Karras, 2006. "Foreign aid and long-run economic growth: empirical evidence for a panel of developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(1), pages 15-28.
    9. Mosley, Paul & Hudson, John & Horrell, Sara, 1987. "Aid, the Public Sector and the Market in Less Developed Countries," Economic Journal, Royal Economic Society, vol. 97(387), pages 616-641, September.
    10. Abdulnasser Hatemi-J & Manuchehr Irandoust, 2005. "Foreign Aid And Economic Growth: New Evidence From Panel Cointegration," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 30(1), pages 71-80, June.
    11. Griffin, Keith, 1970. "Foreign Capital, Domestic Savings and Economic Development," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 32(2), pages 99-112, May.
    12. Gulati, Umesh C, 1978. "Effect of Capital Imports on Savings and Growth in Less Developed Countries," Economic Inquiry, Western Economic Association International, vol. 16(4), pages 563-569, October.
    13. Gupta, Kanhaya L, 1975. "Foreign Capital Inflows, Dependency Burden, and Saving Rates in Developing Countries: A Simultaneous Equation Model," Kyklos, Wiley Blackwell, vol. 28(2), pages 358-374.
    14. Levy, Victor, 1988. "Aid and growth in Sub-Saharan Africa: The recent experience," European Economic Review, Elsevier, vol. 32(9), pages 1777-1795, November.
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    More about this item


    Aid; Aid Uncertainty; Investment; Economic Growth.;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F2 - International Economics - - International Factor Movements and International Business


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