Impacts of Aid for Innovation on Economic Growth in the Sub-Saharan African Countries

Abstract

For several years, sub-Saharan Africa (SSA) countries continue to struggle with poverty, hunger, epidemics, access to proper sanitation and potable water etc. even though the continent is considered to be endowed with half of the world’s natural resources. Low value-added products continue to be the primary export of countries in the continent since it lacks the technical know-how to manage its resources for sustainable growth and development it envisages. This paper examines the effectiveness of aid for innovation in enhancing growth and innovative performance of SSA using the Generalized Method of Moment (GMM) and fixed effect models for the period 2002 to 2015. The empirical results revealed that growth and innovation in the continent could be improved significantly if aid is more advanced to innovation and research. Also, the paper noticed that aid for innovation have more impacts in countries with the lower level of innovation and technological advancement.

Aid for Trade and the Middle-Income Trap

“…Although, the impacts of AfT on the middle-income countries was asymmetrical across countries with different geography, income levels, and different levels of export development, the positive impacts are consistent with various empirical studies on AfT as noted by Udvari (2017) and the most recent review of AfT studies captured in the OECD and WTO's Aid for Trade at a Glance 2019. The results also suggest that the various components of AfT has different impacts for different countries consistent with the strand of aid effectiveness literature which suggest that foreign aid may be more effective if channeled to specific sectors (Udvari & Ampah, 2018). For the sample countries as a whole, the findings suggest that while there have been some improvements in terms of export expansion, in many of the countries a large share of exports are still accounted for by a small number of commodities.…”

“…The impact of foreign aid on economic growth is still inconclusive. Empirical studies on the impact of foreign aid on economic growth and development have produced mixed results (Udvari -Ampah 2018). Some authors such as Askarov -Doucouliagos (2015) and Feeny -Vuong (2017) 2007) on the latter side (Jakupec -Kelly, 2015).…”

Az Aid for Trade és a közepes jövedelmű országok csapdája

“…Bár a nemzetközi kereskedelemben való részvétel jelentős szerepet játszhat a gazdasági növekedésben, gazdasági hasznai egyenlőtlenül oszlanak meg az országok között: a legkevésbé fejlett országok világexportban való részesedése mindössze 1 százalék volt 2020-ban (UNCTAD, 2020). Ezen igyekszik segíteni az Aid for Trade (AfT, segély a kereskedelemért) kezdeményezés, amelyet a Kereskedelmi Világszervezet és az OECD indított útjára 2005-ben (Udvari & Ampah, 2018;Udvari & Kis, 2014;Udvari, 2011). Azóta kereskedelmi kapacitásaik kiépítéséhez a fejlődő országok összesen 409 milliárd dollár hivatalos fejlesztési támogatást kaptak (OECD & WTO, 2019).…”

“…Továbbra is vitatott, hogy milyen hatásai vannak a segélyeknek (Toft & de Soysa, 2021). Több szerző -például Nowak-Lehmann et al ( 2012), Arndt et al (2015), Askarov & Doucouliagos (2015), Birchler & Michaelowa (2016), Gopalan & Rajan (2016), Riddell & Niño-Zarazúa (2016), Feeny & Vuong (2017), Ndikumana & Pickbourn (2017), Udvari & Ampah, (2018), valamint Mahembe & Odhiambo (2021) -vizsgálta a segélyek gazdasági növekedésre és gazdasági-társadalmi fejlődésre gyakorolt hatásait, de nincs egységes álláspont.…”

The potential role of aid in escaping the middle-income trap

“…Recently, the impacts of aid on economic growth and development have been found to depend on some conditions including good governance and fiscal policy in recipient countries (Collier -Dollar 2001;McGillivray et al 2005;Doucouliagos -Paldam 2009). Empirical studies on the impact of foreign aid on economic growth and development have also produced mixed results (Edwards 2015;Udvari -Ampah 2018). Some authors (Askarov -Doucouliagos 2015;Feeny -Vuong 2017) proved the positive relations between aid and economic growth, while Burke and Ahmadi-Esfahani (2006) as well as Rajan and Subramanian (2008) among others could not prove it.…”