Aid, institutions and economic growth in sub-Saharan Africa: Heterogeneous donors and heterogeneous responses

Hassen Abda Wako*

*Corresponding author for this work

    Research output: Contribution to journalArticleAcademicpeer-review

    16 Citations (Web of Science)

    Abstract

    This study contributes to the aid-effectiveness debate using panel data from 43 sub-Saharan African countries over the period 1980-2013. Its novelty lies in assessing the intermediary role of institutions and the importance of recipient and donor heterogeneity. The long-run growth effect of (aggregate) aid from traditional donors is robustly non-positive, and the indirect effect is negative. Disaggregation reveals donor heterogeneity. Chinese aid outperforms aggregate aid from traditional donors with respect to growth; however, it has a negative institutional effect. Recipient heterogeneity is largely a short-run phenomenon, with only a few countries showing some deviations from shared long-run parameter sets. Comparing donor behavior suggests that the future of aid would benefit more from focusing on quality - particularly, specialization and donor alignment.
    Original languageEnglish
    Pages (from-to)23-44
    Number of pages22
    JournalReview of Development Economics
    Volume22
    Issue number1
    DOIs
    Publication statusPublished - 1 Feb 2018

    Keywords

    • PANEL-DATA APPROACH
    • FOREIGN-AID
    • COUNTRIES
    • ALLOCATION
    • DEMOCRACY
    • POLICIES
    • DETERMINANTS
    • GOVERNMENTS
    • ASSISTANCE
    • MODELS

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