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Is Aid Really Dead? Evidences from Sub-Saharan Africa

Author

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  • Ogundipe, Adeyemi
  • Ogundipe, Oluwatomisin

Abstract

This study examined the relationship between foreign aid and economic development in Sub Saharan Africa. The study seeks to examine the role of institutions in aid effectiveness in SSA countries by adopting a theoretical framework similar to the Endogenous/New Growth model and the System Generalized Method of Moments (GMM) technique of estimation in order to overcome the challenge of endogeneity perceived in the institution variables and Aid-Growth argument. It was observed that foreign aid does not significantly influenced Real GDP Per Capita in Sub-Saharan Africa, even after controlling for adequate rule of law and sound public institutions. In the same manner; capital stock, rule of law, control of corruption and Human capital enhanced economic performance while foreign aid failed to contribute meaningfully to economic development in SSA Countries.

Suggested Citation

  • Ogundipe, Adeyemi & Ogundipe, Oluwatomisin, 2013. "Is Aid Really Dead? Evidences from Sub-Saharan Africa," MPRA Paper 51694, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:51694
    as

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    File URL: https://mpra.ub.uni-muenchen.de/51694/1/MPRA_paper_51694.pdf
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    References listed on IDEAS

    as
    1. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    3. Ogundipe, Adeyemi & Amaghionyeodiwe, Lloyd, 2013. "Transnational Trade In Ecowas: Does Export Content Matter?," MPRA Paper 51617, University Library of Munich, Germany.
    4. Channing Arndt & Sam Jones & Finn Tarp, 2009. "Aid and Growth: Have We Come Full Circle?," WIDER Working Paper Series WIDER Discussion Paper 20, World Institute for Development Economic Research (UNU-WIDER).
    5. Martin Mühleisen & Dhaneshwar Ghura & Roger Nord & Michael T. Hadjimichael & E. Murat Ucer, 1995. "Sub-Saharan Africa; Growth, Savings, and Investment, 1986-93," IMF Occasional Papers 118, International Monetary Fund.
    6. Arndt Channing & Jones Sam & Tarp Finn, 2010. "Aid, Growth, and Development: Have We Come Full Circle?," Journal of Globalization and Development, De Gruyter, vol. 1(2), pages 1-29, December.
    7. Wako, Hassen, 2011. "Effectiveness of foreign aid in sub-Saharan Africa: Does disaggregating aid into bilateral and multilateral components make a difference?," MPRA Paper 72617, University Library of Munich, Germany.
    8. David Fielding, 2010. "Aid and Dutch Disease in the South Pacific and in Other Small Island States," Journal of Development Studies, Taylor & Francis Journals, vol. 46(5), pages 918-940.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Foreign aid; Economic Development; Institutions; System GMM;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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