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Institutional benchmarking of foreign aid effectiveness in Africa

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  • Simplice A. Asongu

Abstract

Purpose - – The purpose of this paper is to integrate two main strands of the aid-development nexus in assessing whether institutional thresholds matter in the effectiveness of foreign-aid on institutional development in 53 African countries over the period 1996-2010. Design/methodology/approach - – The panel quantile regression technique enables us to investigate if the relationship between institutional dynamics and development assistance differs throughout the distributions of institutional dynamics. Eight government quality indicators are employed: rule of law, regulation quality, government effectiveness, corruption, voice and accountability, control of corruption, political stability and democracy. Findings - – Three hypotheses are tested and the following findings are established: first, institutional benefits of foreign-aid are contingent on existing institutional levels in Africa; second, but for a thin exception (democracy), foreign-aid is more negatively correlated with countries of higher institutional quality than with those of lower quality; third, the institutional benefits of foreign-aid are not questionable until greater domestic institutional development has taken place. The reverse is true instead. government quality benefits of development assistance are questionable in African countries irrespective of prevailing institutional quality levels. Originality/value - – This paper contributes to existing literature on the effectiveness of foreign-aid by focussing on the distribution of the dependent variables (institutional dynamics). It is likely that best and worst countries in terms of institutions respond differently to development assistance.

Suggested Citation

  • Simplice A. Asongu, 2015. "Institutional benchmarking of foreign aid effectiveness in Africa," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 42(6), pages 543-565, June.
    • Handle: RePEc:eme:ijsepp:v:42:y:2015:i:6:p:543-565
    DOI: 10.1108/IJSE-12-2013-0286
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    Citations

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    Cited by:

    1. Adedeji Adeniran & Mma Amara Ekeruche & Chimere O. Iheonu, 2022. "The Quality Of Budgetary Institutions In Africa: Exploring The Drivers," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(232), pages 127-152, January –.
    2. Simplice Asongu & Jacinta C. Nwachukwu, 2015. "Foreign aid volatility and lifelong learning: demand-side empirics to a textual literature," Working Papers of the African Governance and Development Institute. 15/016, African Governance and Development Institute..
    3. Asongu, Simplice & Nnanna, Joseph, 2019. "Foreign aid, instability and governance in Africa," MPRA Paper 101087, University Library of Munich, Germany.
    4. Simplice A. Asongu & Joseph I. Uduji & Elda N. Okolo-Obasi, 2020. "Foreign aid volatility and lifelong learning," International Journal of Education Economics and Development, Inderscience Enterprises Ltd, vol. 11(4), pages 370-406.
    5. Maonei Mangwanya, 2022. "Evaluating the impacts of foreign aid on low-income countries in Sub-Saharan Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(6), pages 370-377, September.
    6. Asongu Simplice & Jacinta C. Nwachukwu, 2015. "Foreign aid instability and bundled governance dynamics in Africa," Working Papers of the African Governance and Development Institute. 15/058, African Governance and Development Institute..
    7. Dijkstra, Geske, 2018. "Aid and good governance: Examining aggregate unintended effects of aid," Evaluation and Program Planning, Elsevier, vol. 68(C), pages 225-232.
    8. Oasis Kodila-Tedika & Asongu Simplice, 2016. "State fragility, rent seeking and lobbying: evidence from African data," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 43(10), pages 1016-1030, October.
    9. Asongu Simplice, 2014. "The Evolving Debate on the Effect of Foreign Aid on Corruption and Institutions in Africa," Working Papers of the African Governance and Development Institute. 14/009, African Governance and Development Institute..
    10. Simplice A. Asongu & Vanessa S. Tchamyou, 2019. "Foreign Aid, Education and Lifelong Learning in Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(1), pages 126-146, March.
    11. Simplice A. Asongu & Mohamed Jellal, 2014. "Foreign aid, investment and fiscal policy behavior: theory and empirical evidence," Research Africa Network Working Papers 14/030, Research Africa Network (RAN).

    More about this item

    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General

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