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Combined Effects of Foreign Aid and Literacy Rate on Economic Growth

Author

Listed:
  • Seoha Min
  • Seiyoung Park
  • Soobin Yoon
  • Jinhwan Oh

Abstract

Purpose- This study examines how official development assistance (ODA) amounts and literacy rates complexly influence countries’ rates of economic growth. Design/methodology/approach- We conduct a panel regression analysis of data from 2001 to 2020. Findings- The major findings are- (1) ODA is more effective in countries with low literacy rates; (2) ODA can even have negative impacts in high-literacy countries; and (3) in addition to considering foreign aid and its applications, discussions of countries’ development should therefore take into account domestic systems and social geographies. Research limitations/implications- Literacy rate is only one indicator of national development; a broader analysis is therefore needed to fully elucidate countries’ economic development. Originality/value- While previous studies position foreign aid as a natural ground for examining economic development, this study widens the debate by highlighting the importance of countries’ domestic social infrastructure and the networks that undergird development.

Suggested Citation

  • Seoha Min & Seiyoung Park & Soobin Yoon & Jinhwan Oh, 2026. "Combined Effects of Foreign Aid and Literacy Rate on Economic Growth," Review of European Studies, Canadian Center of Science and Education, vol. 17(2), pages 1-57, January.
    • Handle: RePEc:ibn:resjnl:v:17:y:2026:i:2:p:57
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    References listed on IDEAS

    as
    1. Jinhwan Oh & Yunjeong Kim, 2015. "Proliferation and fragmentation: uphill struggle of aid effectiveness," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 7(2), pages 192-209, June.
    2. Paul Clarke & Claire Crawford & Fiona Steele & Anna Vignoles, 2010. "The Choice between fixed and random effects models: some considerations for educational research," The Centre for Market and Public Organisation 10/240, The Centre for Market and Public Organisation, University of Bristol, UK.
    3. Danbi Chung & Jaehee Hwang, 2022. "An Economic and Social Impact of International Aid at National Level: Application of Spatial Panel Model," World, MDPI, vol. 3(3), pages 1-11, August.
    4. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    5. Clarietta Chagwiza & Emmanuel Owusu-Sekyere & Farai Kapfudzaruwa, 2024. "The Effect of Governance on the Relationship Between Research and Development Expenditure and Economic Growth in South Africa," Economies, MDPI, vol. 12(12), pages 1-18, November.
    6. Mr. Tito Cordella & Mr. Giovanni Dell'Ariccia, 2003. "Budget Support Versus Project Aid," IMF Working Papers 2003/088, International Monetary Fund.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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