Importance of official development assistance in improving the economic cycles of Economic and Monetary Community of Central Africa countries

Hervé Nenghem Takam () and Roger Tsafack Nanfosso ()
Additional contact information
Hervé Nenghem Takam: University of Dschang
Roger Tsafack Nanfosso: University of Dschang

SN Business & Economics, 2024, vol. 4, issue 7, 1-22

Abstract: Abstract Despite the abundant literature on official development assistance and its effect on recipients, surprisingly little is known about its effect on economic cycles. The aim of this study is to analyze the effect of official development assistance on the economic cycles of Economic and Monetary Community of Central Africa countries (CEMAC). The methodology used to achieve this objective is the AutoRegressive Distributed Lag (ARDL) method. The study period runs from 1985 to 2019. Our results reveal that, in the short term, official development assistance, in addition to being negative, has no significant impact on the economic cycles of CEMAC countries. On the other hand, official development assistance, in addition to having a positive and statistically significant long-term influence on economic cycles, is procyclical. The significance of Official Development Assistance (ODA) on the output gap is not negligible. Furthermore, using Toda and Yamamoto’s (J Econ 66(1–2):225–250, 1995) causality test, we were able to observe a unidirectional relationship between ODA and business cycles. This causal relationship runs from ODA to cycles. So, in order to control CEMAC countries’ economic cycles and external economic transition, governments should strive to set up appropriate policies. Indeed, it makes sense to set up an appropriate tax system to control donor aid.

Keywords: Official development assistance; Economic cycles; ARDL; CEMAC (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43546-024-00677-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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: https://EconPapers.repec.org/RePEc:spr:snbeco:v:4:y:2024:i:7:d:10.1007_s43546-024-00677-8

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-024-00677-8

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().