External Flows and Inclusive Human Development in Sub-Saharan Africa

International Journal of Happiness and Development, 5(1), pp. 33 – 56 (March, 2019)

27 Pages Posted: 19 Jan 2018 Last revised: 4 Mar 2019

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Ivo J. Leke

University of Saskatchewan; UC Leuven-Limburg

Date Written: January 12, 2017

Abstract

The study assesses how external flows influence inclusive human development in a panel of 48 countries in Sub-Saharan Africa for the period 2000-2012. The empirical evidence is based on Tobit regressions and Generalised Method of Moments. The findings from both estimation techniques reveal that remittances and FDI increase inclusive development whereas foreign aid has the opposite effect. The results suggest some positive and negative impacts of interest for further analysis. First, remittances are negatively associated with: (i) Middle income countries compared to Low income countries where the effect is not significant; (ii) French Civil law countries compared to English Common law countries where the effect is positive and (iii) Resource-rich countries compared to their Resource-poor counterparts where the effect is positive. Second, foreign aid is more negatively linked to Low income, French Civil law, Islam-dominated, Un-landlocked, Resource-rich and Politically-unstable countries. Third, FDI is positively associated with: (i) Low income, French Civil law and Landlocked countries compared to respectively Middle income, English Common law and Un-landlocked countries where the effect is insignificant and (ii) Politically-stable countries compared to their Politically-unstable counterparts where the effect is negative.

Keywords: Foreign Investment; Remittances; Foreign Aid; Inclusive Development; Africa

JEL Classification: F21; F24; F35; I30; O55

Suggested Citation

Asongu, Simplice and Leke, Ivo J., External Flows and Inclusive Human Development in Sub-Saharan Africa (January 12, 2017). International Journal of Happiness and Development, 5(1), pp. 33 – 56 (March, 2019). Available at SSRN: https://ssrn.com/abstract=3100960

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Ivo J. Leke

University of Saskatchewan ( email )

College of Education
Saskatoon, Saskatchewan S7N 5A7
Canada

UC Leuven-Limburg ( email )

Herestraat 49
Leuven, 3000
Belgium

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