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Foreign aid volatility and lifelong learning: demand-side empirics to a textual literature

Simplice Asongu () and Jacinta Nwachukwu ()

No 15/016, Working Papers of the African Governance and Development Institute. from African Governance and Development Institute.

Abstract: Purpose- This paper has put a demand-side empirical structure to the hypothesis that foreign aid volatility adversely affects choices to lifelong learning in recipient countries Design/methodology/approach- Lifelong learning is measured as the combined knowledge acquired during primary, secondary and tertiary educational enrolments. Three types of aggregate foreign aid volatilities are computed in a twofold manner: baseline standard deviations and standard errors (standard deviations of residuals after first-order autoregressive processes). An endogeneity robust dynamic system GMM empirical strategy is employed. Findings- The findings broadly show that foreign aid volatility does not adversely affect the demand-side choices of lifelong learning in Africa. Practical implications- As a policy implication, when faced with aid uncertainty, the demand for education would increase. This may be explained by the need for more self-reliance in order to mitigate income risks or/and the use of education as means of copping with uncertainty. Moreover, the findings indirectly confirm a stream of the literature sustaining that when faced with uncertainty in external financial flows, countries may recourse to promoting human resource development through lifelong learning and knowledge economy as a competitive advantage. This may also explain why countries which have acknowledged scarcity in external financial flows from natural resources have done relatively better compared to their natural resource-rich counterparts. Originality/value- This paper has provided demand-side empirics to a hypothesis that could substantial influence policy making.

Keywords: Lifelong learning; Foreign aid; Development; Africa (search for similar items in EconPapers)
JEL-codes: I20 I28 F35 O55 P16 (search for similar items in EconPapers)
Date: 2015-05
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http://www.afridev.org/RePEc/agd/agd-wpaper/Foreig ... ifelong-learning.pdf Revised version, 2015 (application/pdf)

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Working Paper: Foreign aid volatility and lifelong learning: demand-side empirics to a textual literature (2015) Downloads
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