Foreign aid and mobilization of growth factors in sub-Saharan Africa

Arbeitspapier

This study addresses the macroeconomic effect of foreign aid on the factors of growth. Specifically, we examine the effects of foreign aid on capital investment (human capital, physical capital) in sub-Saharan Africa. Our methodological approach evaluates the effect of disaggregate aid (aid for infrastructure and aid for education) on capital investment. To test our postulate, we make use of panel data of 37 sub-Saharan African states over the period 2000-10. The results of the regressions show that foreign aid positively and significantly affected the physical capital accumulation in the countries under review. The effect of aid for infrastructure is less important in post-conflict environments than in stable environments. Concerning the impacts of aid on human capital, we find that aid enhances enrolment in primary education. We also note that there is no statistical difference between stable countries and post-conflict countries in terms of the effectiveness of aid for education.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2013/103

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Foreign Aid ; National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock ; Human Capital; Skills; Occupational Choice; Labor Productivity
• Subject: foreign aid ; physical capital ; human capital ; panel data ; Africa

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mallaye, Douzounet ; Urbain, Yogo Thierry
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/93711
• Last update: 10.03.2025, 11:46 AM CET