Foreign aid volatility and economic growth in Sub-Saharan Africa: Does institutional quality matter?

Boateng, Elliot; Agbola, Frank W.; Mahmood, Amir

doi:10.1016/j.econmod.2020.12.032

Cited by 50 publications

(20 citation statements)

References 130 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…For instance, Wandeda et al (2021) find that improvements in institutional quality drive output growth in SSA. A similar empirical outcome is evident in the findings of Boateng et al (2021), which confirm the enhancing role of institutional quality on economic growth in SSA. The relative effects of institutional quality are equally observed on some measures of economic growth comprising inequality, poverty, a sustainable environment and youth unemployment.…”

Section: Literature Reviewsupporting

confidence: 83%

Trade facilitation, institutions, and sustainable economic growth: Empirical evidence from Sub‐Saharan Africa

Shen

Ibrahim

Bello

et al. 2022

African Development Review

View full text Add to dashboard Cite

This paper examines the direct and interactive impacts of trade facilitation and institutions on sustainable economic growth (SEG) for 41 Sub-Saharan African economies from 2005 to 2019. The study explores the components of trade facilitation focusing on costs, documents and days (exports and imports) with the aggregated index (TFindex) and institutions, including voice and accountability, government effectiveness, regulatory quality, rule of law, political stability and violence, and control of corruption, used on GDP per capita growth. The empirical evidence relies on the two-step dynamic-system generalized method of moments estimator, accounting for endogeneity, simultaneity, measurement error and reverse causality concerns. The study finds that facilitating trade procedures is a viable option for achieving SEG in the Sub-Saharan Africa region. In addition, institutions driven by government effectiveness, political stability, and regulatory quality are boosters to SEG in the region. Lastly, the interactive impacts of trade facilitation and institutions positively predict the SEG. The study suggests that achieving efficient trading procedures and a sturdy institutional framework will enhance full exploration of the growth potential in SEG. K E Y W O R D Sdynamic-system generalized method of moments, institutions, Sub-Saharan African countries, sustainable economic growth, trade facilitation | INTRODUCTIONThe urgent need to tackle the persistent challenges hampering economic, social and environmental sustainability in the past few decades has witnessed a series of efforts and policy suggestions from governments, policymakers, and national and international organizations. Prominent among these efforts in recent times is the convergence of world leaders from 193 countries across the globe in September 2015, which led to a series of agreements on common and ambitious global goals: "Transforming our World: The 2030 Agenda for Sustainable Development". The Agenda is a well-thoughtout action plan for people, the planet, prosperity, peace and partnership on a set of 17 goals and 169 targets. The motivation behind these goals is the need to build on the achievements recorded in the Millennium Development Goals (MDGs) and further pursue the targets not met. For instance, while the Millennium Development Goal of reducing extreme poverty by 2015 was met, statistics still show that more than 800 million people globally are extremely poor,

show abstract

Section: Literature Reviewsupporting

confidence: 83%

Trade facilitation, institutions, and sustainable economic growth: Empirical evidence from Sub‐Saharan Africa

Shen

Ibrahim

Bello

et al. 2022

African Development Review

View full text Add to dashboard Cite

show abstract

“…This study argues that foreign aid is nothing but a neocolonialist weapon used by the imperial capitalists to sell their ideologies and make the peripheral nations, particularly Africa more dependent on them and also for them to continue their exploitation. The findings of this study are in agreement with past empirical studies (Ali & Isse, 2005;Appiah-Otoo et al, 2022;Boateng et al, 2021;Fatima, 2014;Feeny, 2005;Khan & Ahmed, 2007;Kourtellos et al, 2007;Liu et al, 2014) which found foreign aid to have a detrimental impact on economic growth, despite differences in methodology and geographical locations. Nonetheless, foreign aid appears to positively influence economic growth in Ghana over the short run.…”

Section: Discussion Of Resultssupporting

confidence: 92%

“…Prominent past empirical studies which found a positive relationship between foreign aid and economic growth include: (Asteriou, 2009;Chowdhury & Das, 2011;Clemens et al, 2012;Fashina et al, 2018;Gomanee et al, 2005;Hussen & Lee, 2020;Kitessa, 2018;Mekasha & Tarp, 2013;Museru et al, 2014;Nwaogu & Ryan, 2015). Contrary to these findings, studies such as (Ali & Isse, 2005;Appiah-Otoo et al, 2022;Boateng et al, 2021;Fatima, 2014;Feeny, 2005;Khan & Ahmed, 2007;Kourtellos et al, 2007;Liu et al, 2014) also reveal that foreign aid negatively affects economic growth and development in developing countries.…”

Section: Relationship Between Foreign Aid and Economic Growthmentioning

confidence: 92%

Foreign Aid and External Debt–A Bane or a Boom to the Ghanaian Economy? New Insights

Mumuni¹

2022

Preprint

View full text Add to dashboard Cite

Over recent years, the Ghanaian economy has struggled to find its feet on the ground despite rising public debt and unending inflows of foreign aid. Against this backdrop, this study employs the Vector Error Correction Model (VECM) estimation technique on data from 1970 to 2020 to test the usefulness of the debt overhang hypothesis and the dependency theory in the special case of Ghana. The results confirm evidence of the debt overhang hypothesis and the center-periphery wisdom of the dependency theory in Ghana. The findings depict that an increase in external debt stock and total debt service on external debt have both short and long-run growth-limiting effects on the Ghanaian economy. Similarly, foreign aid catalyzes growth only in the short run and later suppresses rather than stimulates economic growth in Ghana over the long run. The study recommends that harnessing domestic resources, maintaining fiscal discipline by cutting down unproductive expenditures, enhancing an effective tax system, and promoting institutional capabilities to counteract corruption and openness to trade are better ways to fast-track growth development in Ghana.

show abstract

“…As a result, the study uses three proxy indices to represent institutional quality and investigate its impact on environmental sustainability more profoundly. Following Boateng et al ( 2021 ), the study conducts a KMO test to check the validity of IQI, PSI, and PEI. The KMO results provide statistical values of 0.638, 0.600, and 0.7872 for IQI, PSI, and PEI, with eigenvalues of 2.48, 2.61, and 1.88 explaining the total variation of 71, 73, and 75 percent, respectively.…”

Section: Methodsmentioning

confidence: 99%

Do trade openness and institutional quality contribute to carbon emission reduction? Evidence from BRICS countries

Chhabra

Giri

Kumar

2023

Environ Sci Pollut Res

View full text Add to dashboard Cite

The quest for rapid economic development by modern nations has led to an unprecedented increase in carbon emissions. Knowledge spillovers from increasing trade activities and effective environmental regulations have been suggested as viable means of controlling these rising emissions. To that end, this study aims to examine the impact ‘trade openness’ and ‘institutional quality’ had on CO 2 emissions in BRICS countries from 1991 to 2019. Three indices, namely, institutional quality, political stability, and political efficiency, are constructed to measure the overall institutional impact on emissions. A single indicator analysis is conducted for a deeper investigation of each index component. Given the existence of cross-sectional dependence among variables, the study uses the modern dynamic common correlated effects (DCCE) method to estimate their long-run relationships. Confirming the pollution haven hypothesis, the findings reveal that ‘trade openness’ indeed is a cause of environmental degradation in the BRICS nations. Through reduced corruption, improved political stability, bureaucratic accountability, and better law and order, ‘institutional quality’ is found to be contributing positively to environmental sustainability. It is also confirmed that renewable energy sources do have a positive environmental impact; however, it is found to be insufficient to offset the adverse effects caused by non-renewable sources. Based on the results, it is advised that BRICS countries should strengthen their cooperation with developed countries so that positive spillovers of green technologies may occur. Moreover, renewable resources should be aligned with firms’ profits so that sustainable production practices can become the new norm.

show abstract

Foreign aid volatility and economic growth in Sub-Saharan Africa: Does institutional quality matter?

Cited by 50 publications

References 130 publications

Trade facilitation, institutions, and sustainable economic growth: Empirical evidence from Sub‐Saharan Africa

Trade facilitation, institutions, and sustainable economic growth: Empirical evidence from Sub‐Saharan Africa

Foreign Aid and External Debt–A Bane or a Boom to the Ghanaian Economy? New Insights

Do trade openness and institutional quality contribute to carbon emission reduction? Evidence from BRICS countries

Contact Info

Product

Resources

About