Is Aid Really Dead? Evidence from Sub-Saharan Africa

International Journal of Humanities and Social Science, Vol. 4 No. 10

16 Pages Posted: 14 Nov 2014

See all articles by Adeyemi Ogundipe

Adeyemi Ogundipe

Covenant University

Paul Ojeaga

University of Bergamo

Oluwatomisin Ogundipe

Covenant University

Date Written: November 12, 2014

Abstract

This study examined the relationship between foreign aid and economic development in Sub-Saharan Africa. The study seeks to examine the role of macroeconomic policy 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 attempt to overcome the challenge of endogeneity perceived in the institution variables and aid-growth nexus. It was observed that foreign aid does not significantly influenced Real GDP Per Capita in Sub-Saharan Africa, but the relation reverses after controlling for the role of economic policy; though the response of real GDP per capita tends to be infinitely inelastic. Subsequently, capital stock, labour force, institutional quality and human capital meaningfully contributed to economic development in SSA.

Keywords: Foreign aid, Economic Development, Institutions, System GMM

JEL Classification: F35, C23, G18, O1, P48

Suggested Citation

Ogundipe, Adeyemi and Ojeaga, Paul and Ogundipe, Oluwatomisin, Is Aid Really Dead? Evidence from Sub-Saharan Africa (November 12, 2014). International Journal of Humanities and Social Science, Vol. 4 No. 10. Available at SSRN: https://ssrn.com/abstract=2523500

Adeyemi Ogundipe (Contact Author)

Covenant University ( email )

Canaanland
Km 10 Idiroko road
Ota, 24001
Nigeria
+2348161927372 (Phone)

Paul Ojeaga

University of Bergamo ( email )

Via Salvecchio, 19
Bergamo, 24129
Italy

Oluwatomisin Ogundipe

Covenant University

P.M.B. 1023
Km 10 Idiroko road
Ota, Ogun State 234
Nigeria

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