The Effects of Foreign Aid in Sub-Saharan Africa

Robert Gillanders

The Economic and Social Review, 2016, vol. 47, issue 3, 339-360

Abstract: This paper contributes to the aid effectiveness debate by applying a vector autoregression model to a panel of Sub-Saharan African countries. This method avoids the need for instrumental variables and allows one to analyse the effect of foreign aid on human development and on economic development simultaneously. The full sample results indicate a small increase in economic growth following a fairly substantial aid shock. The size of the effect puts the result somewhere between the arguments of aid optimists and those of aid pessimists. Human development, for which I use the growth rate of life expectancy as a proxy, responds positively to aid shocks in democracies.

Keywords: foreign aid; sub-Saharan Africa (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: The Effects of Foreign Aid in Sub-Saharan Africa (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eso:journl:v:47:y:2016:i:3:p:339-360

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