This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub-Saharan Africa (SSA) countries from 1980-2010. We find that remittances directly increase output per worker if complemented with education. The indirect effects vary with the economic characteristics of the recipient nations: while remittances have increased human capital among the low-income nations, among the upper-middle-income nations, they have mostly increased total factor productivity, but are still inversely related to factor inputs among the lower-middle-income nations of SSA. Finally, remittances are more effective when institutional risk is reducing.JEL classification: F22. F24, F35, F43, F63, O15, O16; O43; O55
Purpose
Agriculture is the major source of livelihood for the majority of population in Sub-Saharan Africa but its productivity is not only low it has started showing signs of decline since 2012. The purpose of this paper is to find out whether official development assistance for agriculture is effective.
Design/methodology/approach
The data for development assistance for agriculture are broken down into the major agricultural sectors in receiving countries. The empirical evidence is based on the two-step system, i.e. generalized method of moments, to assess the degree of responsiveness of agricultural productivity to development assistance.
Findings
There is a positive relationship between development assistance and agricultural productivity in general. However, when broken down into the major agricultural recipient sectors, there is a substitution effect between food crop production and industrial crop production. Better institutions and economic freedom are found to enable agricultural productivity growth, and to increase the effectiveness of development assistance. The structural economic transformation associated with agricultural development assistance is also found to be weak.
Practical implications
Allocation of development assistance for agriculture is primarily determined by need, although expected effectiveness also increases the assistance receipts. Agricultural assistance policies could focus more on building productive capacity to reduce the need while boosting effectiveness.
Originality/value
Breaking down data into agricultural recipient sectors and controlling for the potential spurious correlation under the assumption that more development assistance could be allocated, where agricultural productivity is already increasing due to some other factors.
We survey about 110 recently published studies on Sino-African relations; put some structure on the documented issues before suggesting some solutions and strategies to the identified policy syndromes. The documented issues classified into eight main strands include, China:targeting nations with abundant natural resources; focusing on countries with bad governance; not hiring local workers; outbidding other countries by flouting environmental and social standards; importing workers that do not integrate into domestic society and living in extremely simple conditions; exhibiting low linkages between her operations and local businesses; exporting low quality products to Africa; and the emergence of China hindering Africa's development.
We survey about 110 recently published studies on Sino-African relations; put some structure on the documented issues before suggesting some solutions and strategies to the identified policy syndromes. The documented issues classified into eight main strands include, China:targeting nations with abundant natural resources; focusing on countries with bad governance; not hiring local workers; outbidding other countries by flouting environmental and social standards; importing workers that do not integrate into domestic society and living in extremely simple conditions; exhibiting low linkages between her operations and local businesses; exporting low quality products to Africa; and the emergence of China hindering Africa's development.
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