Foreign Aid in Equatorial Guinea: Macroeconomic Features and Future Challenges
The paper carries out a deep case study of the international aid that Equatorial Guinea receives. This is an extremely interesting country because, not being a failed state, it presents very low indexes in institutional quality. Its oil richness, which began to be exploited by foreign investors in 1996, has meant a structural change of extraordinary interest without the traditional effects of Dutch disease. While in 1989 the country financed 54% of its GDP with ODA, in 1996 this ratio represented only 22% and nowadays barely reaches 0.5% thanks to the enormous growth of foreign investment. The article analyses empirically the predictability of the ODA flows -mainly composed of Spanish funds-, their stability, cyclical behaviour and stabilizing effect on the GDP. The main findings of the study are that the ODA has been a hardly predictable, relatively stable, counter-cyclical flow and that it does have a stabilizing effect on its product. The FDI (Direct Foreign Investment), on the other hand is much more volatile and pro-cyclical, although it shares the stabilizing effect of the ODA. For every million dollars of the FDI, GDP grew 0.1%. Development aid, on the contrary, doesn’t have a statistically significant impact if we consider the time period 1985-2006. But it does in 1985-1995. Every additional million dollars of ODA made the GDP grow 1.3%. The sectoral analysis of ODA revealed that more than 80% of Spanish aid has been invested in social services, especially education (46%) and healthcare (26%), carried out by two NGOs that somehow became accomplices of the social underdevelopment that the Guinean government maintains since its independence. The article concludes with some ideas on how to improve the quality of Spanish ODA, especially proposing a deadline for the aid and a result-based conditionality, like the Aid Efficiency Agenda of Accra suggests.
|Date of creation:||Sep 2010|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006.
"Institutions and the Resource Curse,"
Royal Economic Society, vol. 116(508), pages 1-20, 01.
- Halvor Mehlum & Karl Moene & Ragnar Torvik, 2002. "Institutions and the resource curse," GE, Growth, Math methods 0210004, EconWPA.
- Halvor Mehlum & Karl Moene & Ragnar Torvik, 2004. "Institutions and the Resource Curse," DEGIT Conference Papers c009_012, DEGIT, Dynamics, Economic Growth, and International Trade.
- Mehlum, Halvor & Moene, Karl-Ove & Torvik, Ragnar, 2003. "Institutions and the resource curse," Memorandum 29/2002, Oslo University, Department of Economics.
- Halvor Mehlum & Karl Moene & Ragnar Torvik, 2002. "Institutions and the resource curse," Development and Comp Systems 0210003, EconWPA.
- Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2007. "Governance Matters VI: Aggregate and Individual Governance Indicators, 1996-2006," Policy Research Working Paper Series 4280, The World Bank.
- Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2008. "Governance matters VII : aggregate and individual governance indicators 1996-2007," Policy Research Working Paper Series 4654, The World Bank.
- Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2009. "Governance matters VIII : aggregate and individual governance indicators 1996-2008," Policy Research Working Paper Series 4978, The World Bank.
- Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
- Jeffrey A. Frankel, 2010. "The Natural Resource Curse: A Survey," NBER Working Papers 15836, National Bureau of Economic Research, Inc.
- Frankel, Jeffrey, 2010. "The Natural Resource Curse: A Survey," Working Paper Series rwp10-005, Harvard University, John F. Kennedy School of Government.
- Jeffrey Frankel, 2010. "The Natural Resource Curse: A Survey," CID Working Papers 195, Center for International Development at Harvard University.
- Emmanuel Frot & Javier Santiso, 2008. "Development Aid and Portfolio Funds: Trends, Volatility and Fragmentation," OECD Development Centre Working Papers 275, OECD Publishing.
- World Bank, 2009. "World Development Indicators 2009," World Bank Publications, The World Bank, number 4367, August.
- Simeon Djankov & Jose Montalvo & Marta Reynal-Querol, 2008. "The curse of aid," Journal of Economic Growth, Springer, vol. 13(3), pages 169-194, September.
- Simeon Djankov & José García-Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Working Papers 257, Barcelona Graduate School of Economics.
- Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Economics Working Papers 870, Department of Economics and Business, Universitat Pompeu Fabra.
- Devarajan, Shantayanan & Le, Tuan Minh & Raballand, Gael, 2010. "Increasing public expenditure efficiency in oil-rich economies : a proposal," Policy Research Working Paper Series 5287, The World Bank. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:25001. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.