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Increasing Foreign Aid for Inclusive Human Development in Africa

Author

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  • Simplice A. Asongu

    (African Governance and Development Institute
    University of South Africa)

  • Jacinta C. Nwachukwu

    (Coventry University)

Abstract

In the light of evidence that poverty has been decreasing in all regions of the world with the exception of Africa, where about 45% of countries in sub-Saharan Africa did not achieve the Millennium development goal extreme poverty target, this study assesses whether increasing foreign aid improves inclusive human development. The investigation is on 53 African countries for the period 2005–2012. The empirical analysis is based on (1) the generalised method of moments (GMM) to control for persistence in inclusive human development, simultaneity and time-invariant omitted variables and (2) Instrumental Variable Tobit Regressions to control for simultaneity and the limited range in the dependent variable. The adopted foreign aid variables are: ‘humanitarian assistance’, ‘action on debt’ ‘aid for social infrastructure’, ‘aid to the productive sector’, ‘aid to the multi sector’, ‘aid for economic infrastructure’ and ‘programme assistance’. The following findings are established. From the GMM specifications, there are (1) synergy effects from ‘aid to the productive sector’ and a positive net effect from ‘programme assistance’ and (2) negative net impacts from ‘aid to social infrastructure’ and human assistance, albeit with positive marginal effects. From Instrumental Variable Tobit regressions (1) there is a synergy effect from ‘aid for economic infrastructure’ and (2) there are negative net impacts from ‘aid for social infrastructure’, ‘aid to the productive sector’ and human assistance, albeit with positive marginal effects. Policy implications are discussed.

Suggested Citation

  • 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.
  • Handle: RePEc:spr:soinre:v:138:y:2018:i:2:d:10.1007_s11205-017-1668-3
    DOI: 10.1007/s11205-017-1668-3
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    Cited by:

    1. Riccardo Pelizzo & Abel Kinyondo & Zim Nwokora, 2018. "Development in Africa," Research Africa Network Working Papers 18/002, Research Africa Network (RAN).
    2. Uchenna Efobi & Simplice Asongu & Ibukun Beecroft, 2018. "Aid, Terrorism, and Foreign Direct Investment: Empirical Insight Conditioned on Corruption Control," International Economic Journal, Taylor & Francis Journals, vol. 32(4), pages 610-630, October.
    3. Simplice A. Asongu Ph.D & Joseph Nnanna, . "Foreign Aid And Sustainable Inclusive Human Development In Africa," Journal of Economic and Sustainable Growth 2, Office Of The Chief Economist, Development Bank of Nigeria.
    4. Asongu, Simplice A. & Odhiambo, Nicholas M., 2021. "Inequality, finance and renewable energy consumption in Sub-Saharan Africa," Renewable Energy, Elsevier, vol. 165(P1), pages 678-688.
    5. Simplice A. Asongu & Uchenna Efobi & Belmondo V. Tanankem & Evans S. Osabuohien, 2019. "Globalisation and Female Economic Participation in Sub-Saharan Africa," Working Papers of The Association for Promoting Women in Research and Development in Africa (ASPROWORDA). 19/005, The Association for Promoting Women in Research and Development in Africa (ASPROWORDA).
    6. Simplice A. Asongu & Hillary C. Ezeaku, 2020. "Aid Grants vs. Technical Cooperation Grants: Implications for Inclusive Growth in Sub-Saharan Africa, 1984-2018," Research Africa Network Working Papers 20/091, Research Africa Network (RAN).
    7. Simplice A. Asongu & Rexon T. Nting, 2021. "The role of finance in inclusive human development in Africa revisited," Research Africa Network Working Papers 21/006, Research Africa Network (RAN).
    8. Simplice Asongu & Vanessa Tchamyou & Ndemaze Asongu & Nina Tchamyou, 2017. "The Comparative African Economics of Inclusive Development and Military Expenditure in Fighting Terrorism," Journal of African Development, African Finance and Economic Association (AFEA), vol. 19(2), pages 77-91.
    9. Asongu, Simplice A. & Odhiambo, Nicholas M., 2020. "Inequality and gender inclusion: Minimum ICT policy thresholds for promoting female employment in Sub-Saharan Africa," Telecommunications Policy, Elsevier, vol. 44(4).
    10. John Ssozi & Simplice Asongu & Voxi Heinrich Amavilah, 2019. "The effectiveness of development aid for agriculture in Sub-Saharan Africa," Journal of Economic Studies, Emerald Group Publishing, vol. 46(2), pages 284-305, March.
    11. Ssozi, John & Asongu, Simplice & Amavilah, Voxi, 2017. "Is Aid for Agriculture Effective in Sub-Saharan Africa?," MPRA Paper 83073, University Library of Munich, Germany.

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    More about this item

    Keywords

    Foreign aid; Sustainable development; Africa;
    All these keywords.

    JEL classification:

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

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