Ethnic Fractionalisation and Aid Effectiveness

Hodler, Roland; Knight, David S.

doi:10.1093/jae/ejr036

Cited by 14 publications

(10 citation statements)

References 47 publications

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“…The finding that aid does not lead to economic growth in Tanzania is consistent with Hodler and Knight's (2011) finding that aid is not effective in economic growth in ethnically fractionalized countries. There are more than 120 ethnically different tribes in Tanzania.…”

Section: Export Expansion and Economic Growth In Tanzaniasupporting

confidence: 82%

“…Their Granger causality test results provide little support for the export-led economic growth hypothesis. Hodler and Knight (2011) employed panel data covering 114 aid-recipient countries and applied two-stage least squares and GMM estimation methods. They showed that trade openness does not contribute to economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Dalgaard et al (2004) found correlations between aid inflow and economic growth rate, as both factors can be explained by some other common exogenous institutional factors. Hodler and Knight (2011) employed panel data covering 114 aid-recipient countries over the period 1962-2001 and applied two-stage least squares and GMM estimation methods. They showed that aid contributes to economic growth in ethnically homogeneous countries, but its effect is not significant in Africa.…”

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Export Expansion and Economic Growth in Tanzania

Mah

2014

Glob. Econ. J.

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This paper reveals the source of rapid economic growth in Tanzania since market reform in the late 1980s. It applies the variance bounds cointegration test to economic growth, investment, exports, and aid inflow. The cointegration test results show that these variables are cointegrated. The error correction model shows that export expansion causes economic growth positively. Meanwhile, economic growth is revealed not to cause export expansion. The results are robust to the measure of economic growth rate. Neither investment nor aid inflow is revealed to be the source of the rapid economic growth of Tanzania.

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Section: Export Expansion and Economic Growth In Tanzaniasupporting

confidence: 82%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Export Expansion and Economic Growth in Tanzania

Mah

2014

Glob. Econ. J.

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“…Other conditions, such as ethnic composition and the level of aid intensity, also affect the effectiveness of aid. For example, Hodler and Knight () found that aid can promote economic growth in mono‐ethnic nations; however, in certain countries with complex ethnic compositions, including most sub‐Saharan African countries and other regions, aid is ineffective and even harmful for economic growth. O'Connell and Soludo () revealed that a high level of aid intensity tends to encourage recipient countries to develop dependence, and when the aid level decreases, the effectiveness rapidly decreases.…”

Section: Introductionmentioning

confidence: 99%

Has International Aid Promoted Economic Growth in Africa?

Cai¹,

Zheng²,

Hu³

et al. 2018

African Development Review

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Using panel data on 47 African countries from 1980-2013, this paper investigates the effects of aid on Africa's economic growth from the perspective of political stability. We find that international aid can promote economic growth in Africa, but the effectiveness of aid depends on countries' political stability. Further, the intensity of aid affects its effectiveness. When the aid-GDP ratio is between 0 and 69 per cent, aid can promote economic growth in recipient countries, and when this ratio is 27 per cent, the marginal impact of aid on economic growth is maximized. The findings of this paper suggest that providers of aid should avoid providing a substantial amount of aid to countries at risk of political unrest, and they must determine the optimal scale of aid based on the economic development of recipient countries in order to enable aid to generate better results. Recipient countries should maintain social and political stability and ensure that they do not develop an excessive dependence on aid so that they can achieve the self-sustainable development of their own economies.

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“…Yusuf and Nabeshima (2012) attribute much of their success to investment in human capital.9 The literature is summarized inAlesina and others (2005) Hodler and Knight (2011). find that rent-seeking contests for aid inflows become more damaging as ethnic fractionalization grows, and that this effect is primarily responsible for the detrimental impact of ethnic fractionalization on economic development.…”

mentioning

confidence: 99%

Macroeconomic Issues in Small States and Implications for Fund Engagement

2013

Policy Papers

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This paper reviews the macroeconomic characteristics and performance of small states and discusses ways in which the Fund’s engagement with these countries could be better tailored to meet their needs. The Fund previously examined small states issues in 2000, informed by a Joint Task Force Report of the Commonwealth Secretariat (CS) and World Bank. Small states continue to face many of the same challenges they did then, and the 2000 Small States Report remains the foundation for much of the work in this area, both inside and outside the Fund. However, the relative macroeconomic performance of small states has deteriorated since the late 1990s, and a fresh look is warranted.

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Ethnic Fractionalisation and Aid Effectiveness

Cited by 14 publications

References 47 publications

Export Expansion and Economic Growth in Tanzania

Export Expansion and Economic Growth in Tanzania

Has International Aid Promoted Economic Growth in Africa?

Macroeconomic Issues in Small States and Implications for Fund Engagement

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