Is Aid Really Dead? Evidences from Sub-Saharan Africa

Adeyemi Ogundipe and Oluwatomisin Ogundipe

MPRA Paper from University Library of Munich, Germany

Abstract: This study examined the relationship between foreign aid and economic development in Sub Saharan Africa. The study seeks to examine the role of institutions in aid effectiveness in SSA countries by adopting a theoretical framework similar to the Endogenous/New Growth model and the System Generalized Method of Moments (GMM) technique of estimation in order to overcome the challenge of endogeneity perceived in the institution variables and Aid-Growth argument. It was observed that foreign aid does not significantly influenced Real GDP Per Capita in Sub-Saharan Africa, even after controlling for adequate rule of law and sound public institutions. In the same manner; capital stock, rule of law, control of corruption and Human capital enhanced economic performance while foreign aid failed to contribute meaningfully to economic development in SSA Countries.

Keywords: Foreign aid; Economic Development; Institutions; System GMM (search for similar items in EconPapers)
JEL-codes: C33 F35 G18 O1 P48 (search for similar items in EconPapers)
Date: 2013-11-24
New Economics Papers: this item is included in nep-afr
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:51694

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