Economics at your fingertips  

The Effect of Aid on Growth in the Presence of Economic Regime Change

Solomon Samanhyia and Danny Cassimon ()

The African Finance Journal, 2019, vol. 21, issue 2, 1-23

Abstract: The empirical literature on aid effectiveness is mired with controversy. In this regard, the paper aims to investigate the effect of aid on economic growth in Ghana. Using Auto-Regressive Distributed Lag models as the main estimation strategy, the study concludes that aid has a positive and statistically significant effect on economic growth. The effect of aid on economic growth is more pronounced taking into account the marginal effect of a shift in economic policy from a controlled economic regime to an open market system. The result is robust when the data is triangulated with other estimation methods. Following the key findings, the study recommends that government pursues economic policies that promote more private sector participation. Also, alternative financing that focuses on the domestic market should be encouraged to avoid the negative impact of dwindling aid inflows.

Keywords: Economic Growth; Aid; Economic Regime; Cointegration; Ghana (search for similar items in EconPapers)
JEL-codes: F35 G2 O11 O4 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (text/html)

Related works:
Working Paper: The effect of aid on growth in the presence of economic regime change (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in The African Finance Journal from Africagrowth Institute Contact information at EDIRC.
Bibliographic data for series maintained by Kirk De Doncker ().

Page updated 2023-02-05
Handle: RePEc:afj:journl:v:21:y:2019:i:2:p:1-23