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Aid-Macroeconomic Policy Environment and Growth:Evidence From Sub-Saharan Africa

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  • Afees Adebare SALISU*
  • Fidelis O.OGWUMIKE**

Abstract

This paper is a contribution to the growing debate on aid-growth nexus. It examines the role of macroeconomic policy environment in aid-growth nexus an area which has received less attention in Sub-Saharan Africa (SSA). In a panel regression model covering twenty Sub-Saharan African countries, estimated with the use of OLS and 2SLS over the period 1970 to 2001(in nine-four year sub-periods), the study finds that a sound macroeconomic environment is fundamental for the effective contribution of aid to sustainable growth. The results also show that macroeconomic policy environment is an important determinant of growth. Overall, the paper concludes that the macroeconomic instability and poor institutional framework have crippled the growth of aid recipients in SSA.

Suggested Citation

  • Afees Adebare SALISU* & Fidelis O.OGWUMIKE**, 2010. "Aid-Macroeconomic Policy Environment and Growth:Evidence From Sub-Saharan Africa," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 20, pages 1-12.
    • Handle: RePEc:pje:journl:article10iii
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    3. Joseph Olarewaju Afolabi & Justine Tochukwu Nwanekwere, 2019. "Macroeconomic Effect of Foreign Aid," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 6(2), pages 197-204.
    4. Innocent .U. Duru & Bartholomew .O.N. Okafor & Millicent Adanne Eze & Gabriel .O. Ebenyi, 2020. "Foreign Aid and Economic Growth: Empirical Evidence from Nigeria," Growth, Asian Online Journal Publishing Group, vol. 7(1), pages 35-50.
    5. Nyoni, Thabani, 2018. "What determines private investment in Burundi?," MPRA Paper 87614, University Library of Munich, Germany.
    6. Ferreira, I.A.R. & Simoes, M.C.N., 2013. "Aid And Growth: A Comparative Study Between Sub-Saharan Africa And Asia," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(1), pages 113-132.
    7. Iyabo A. Olanrele & Taofik Mohammed Ibrahim, 2015. "Does Developmental Aid Impact or Impede on Growth: Evidence from Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 288-296.
    8. Adeniyi Jimmy Adedokun, 2017. "Foreign Aid, Governance and Economic Growth in Sub-Saharan Africa: Does One Cap Fit All?," African Development Review, African Development Bank, vol. 29(2), pages 184-196, June.
    9. Saima Liaqat & Temesgen Kifle & Mohammad Alauddin, 2016. "Aid-Macroeconomic Policy Environment- Growth Nexus: Evidence from Selected Asian Countries," Discussion Papers Series 565, School of Economics, University of Queensland, Australia.
    10. Smirnova Elena Evgenievna, 2015. "Investment Activity of Natural Persons: Russian Experience of Tax Stimulation," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 833-842.

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