Delving out of “Aid-Mirage Curse” in African Countries

Jules-Eric Tchapchet-Tchouto ()
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Jules-Eric Tchapchet-Tchouto: HDR, CERME & 3 in 1 Research Lab., Public Economics Department, FSEG

Economics Bulletin, 2025, vol. 45, issue 3, 1354 - 1364

Abstract: Official Development Aid (ODA) can generate distortions in recipients' African countries, making the potential benefit turning into Aid ineffectiveness or Aid-Curse scenario. Delving into the intricate link between Economic complexity and ODA outcomes, this study innovates by exploring an efficient mechanism that can turn the Aid-mirage curse into a ‘miracle' in a panel of 17 African countries. Using Ordinary Least Squares, Quantile Analysis and Two-Step System-Generalized Method of Moments, findings robustly established that interaction effect between ODA coupled good quality of institutions can enhance economic structural transformation, proxied by Economic complexity. Quality of institutions environment is a key factor for ODA effectiveness in Africa.

Keywords: Aid-Mirage Curse; Efficient ODA; Economic Complexity; Quality of Institutions; African Economies. (search for similar items in EconPapers)
JEL-codes: F3 O1 (search for similar items in EconPapers)
Date: 2025-09-30
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