Growth, debt burdens and alleviating effects of foreign aid in least developed countries

Bjerg, Christina; Bjørnskov, Christian; Holm, Anne I. S.

doi:10.1016/j.ejpoleco.2010.08.003

Cited by 29 publications

(9 citation statements)

References 36 publications

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“…Likewise, Mallik (2008) took into account 35 years of overseas developmental assistance to six poorest African countries (Central African Republic, Malawi, Niger, Sierra Leone, Mali and Togo) using a cointegration analysis and found the long-term effect of aid on real GDP was negative, for the majority of countries used in the study. Equally, assessing growth and debt burden in least developing countries, Bjerg et al (2011) found that aid has no relationship with growth, but aid is effective in repayment of debt. Barro (1991) and Duc (2006) used a model of growth theory to model overseas developmental assistance for 39 different recipient countries during several time-periods.…”

Section: Cross-country Studiesmentioning

confidence: 99%

The Impact of Aid and Macroeconomic Policy on Growth in Nigeria: A Bounds Testing Approach

Usman¹,

Apinran²

2019

Asian Economic and Financial Review

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This paper explores the impact of aid and macroeconomic policy on growth with Nigeria as a case study. Given its limited use in the aid efficiency literature on Nigeria, the autoregressive distributed lag (ARDL) model was applied in this study for time series data covering 44 years (1970-2014) in an attempt to expand the use of this approach and to check if a similar (negative) relationship is found between aid and growth. The results showed a positive correlation i.e. aid supports growth in Nigeria in the long-term. The other variables identified above and trends such as labour force and technological change were also found to be positive towards economic growth in the long-term, though governance showed an insignificant relationship. In the short-term, investment and policy were found to have a negative correlation on growth. More data on governance (before 1996) could be applied to expand the findings of this study and other measures of macroeconomic policy could be used to test if a similar result is obtained as principal component analysis was applied in this case. Given our findings, this paper recommends that the government of Nigeria should prioritize aid since it has been empirically found to support growth. Contribution/ Originality: This paper uses the endogenous growth theory taking into account the role of macroeconomic policy and governance to test the effectiveness of aid on growth in Nigeria which no other research has done.

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Section: Cross-country Studiesmentioning

confidence: 99%

The Impact of Aid and Macroeconomic Policy on Growth in Nigeria: A Bounds Testing Approach

Usman¹,

Apinran²

2019

Asian Economic and Financial Review

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“…Sen (2006) and Tarp (2006) stress that aid is beneficial if properly administered. Related research considers the effectiveness of aid to be dependent on the existence of certain features in recipient countries, such as the share of a country's area that lies in the tropics (Daalgard, Hansen, and Tarp 2004), the level of democratization (Svensson 1999), institutional quality (Burnside and Dollar 2004), political stability (Chauvet and Guillaumont 2004), vulnerability to external shocks (Guillaumont and Chauvet 2001), absorptive capacity (Chauvet and Guillaumont 2004), and the level of indebtedness (Bjerg, Bjørnskov, and Holm 2010). However, Easterly, Levine, and Roodman (2004), Rajan and Subramanian (2008), and Doucouliagos and Paldam (2009) show that these results are fragile, being sensitive to small changes in the data set or in the model specification.…”

Section: The Literaturementioning

confidence: 99%

Does foreign aid really raise per capita income? A time series perspective

Nowak‐Lehmann

Dreher

Herzer

et al. 2012

Canadian J of Economics

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“…Scartascini and Crain (2002) further developed it to apply to multiparty systems, and introduced the term "modified universalism." Given that important variables are seldom provided on an annual basis for the examined period (especially for poor and fragile developing countries), we introduce time periods (following, e.g., Presbitero 2009, andBjerg et al 2011). Within those time periods we calculate the variable averages.…”

Section: Recipient Countries (Dataset D)mentioning

confidence: 99%