Working Paper 221 - Employment Effects of Multilateral Development Bank Projects The Case of the African Development Bank

Abebe Abebe, Adeleke Salami () and Anthony Simpasa ()

Working Paper Series from African Development Bank

Abstract: Employment impact of development aid in Africa is investigated using a set of projects implemented by the African Development Bank (AfDB) in the last 20 years. The results indicate heterogeneous effect of aid. Projects directed at productive sectors, mainly those that focus on financing small scale enterprises and microcredit institutions, tend to have the largest employment impact than those focussing on health and education. More importantly, the implied employment effect of AfDB projects is much larger than the potential employment that could be deduced from aid-growth-employment nexus using macro data, particularly in the last decade. This could be due to the shift in the focus of development assistance away from productive sectors over this period. If inclusive development is the overarching objective of development assistance, then, there may be a need to revisit the current allocation of aid to different uses.

Date: 2015-04-21
New Economics Papers: this item is included in nep-ppm
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