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Foreign Aid and the Human Development Indicators in Sub-Saharan Africa

Author

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  • Johnson P. Asiama

    (Research Department, Bank of Ghana. [Email: jasiama@bog.gov.gh])

  • Peter Quartey

    (Institute for Statistical Social and Economic Research, University of Ghana, Legon –Accra, Ghana. [Email: pquartey@isser.ug.edu.gh])

Abstract

The recent literature on aid effectiveness suggests the presence of non-linear effects as well as other country-specific effects in the aid-growth relationship, which may explain the different findings in the empirical literature. We argue that even after correcting for the above, the focus must be on welfare effects of aid in recipient countries since other contemporaneous effects might be involved, that may not be captured in a traditional analysis of the aid-growth relationship. We present some new and exclusive evidence on the effect of aid on indicators of welfare in Sub-Saharan Africa, a region that is said to be the least probable to achieve the Millennium Development Goals (MDGs). Our findings suggest that aggregate bilateral aid does not show a significant effect on the human development indicators and other welfare variables. However, disaggregated aid in the form of sector specific and programme aid do show a significant effect on the HDIs. The article proposes that aid is scaled up but targeted at areas where these are most effective. Moreover, other innovative ways of aid delivery apart from the traditional project and programme assistance need to be considered.

Suggested Citation

  • Johnson P. Asiama & Peter Quartey, 2009. "Foreign Aid and the Human Development Indicators in Sub-Saharan Africa," Journal of Developing Societies, , vol. 25(1), pages 57-83, January.
    • Handle: RePEc:sae:jodeso:v:25:y:2009:i:1:p:57-83
    DOI: 10.1177/0169796X0902500103
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    References listed on IDEAS

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    Cited by:

    1. Asongu, Simplice & Nwachukwu, Jacinta, 2015. "Foreign aid volatility and lifelong learning: demand-side empirics to a textual literature," MPRA Paper 67853, University Library of Munich, Germany.
    2. Simplice A. ASONGU & Jacinta NWACHUKWU & Nicholas BIEKPE, 2019. "Foreign Aid, Terrorism And Growth: Conditional Evidence From Quantile Regression," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(3), pages 457-486, September.
    3. Simplice A. Asongu & Uchenna R. Efobi & Ibukun Beecroft, 2021. "Aid in Modulating the Impact of Terrorism on FDI: No Positive Thresholds, No Policy," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 432-456, October.
    4. Asongu, Simplice & Efobi, Uchenna & Beecroft, Ibukun, 2015. "FDI, Aid, Terrorism: Conditional Threshold Evidence from Developing Countries," EconStor Preprints 114569, ZBW - Leibniz Information Centre for Economics.
    5. José Alves & Cláudia Couto & José Carlos Coelho, 2024. "The Impact of Foreign Aid on Aggregate Welfare Measures: A Panel Data Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1210-1230, March.
    6. Simplice A. Asongu & Joseph I. Uduji & Elda N. Okolo-Obasi, 2020. "Foreign aid volatility and lifelong learning," International Journal of Education Economics and Development, Inderscience Enterprises Ltd, vol. 11(4), pages 370-406.
    7. Sakiru Oladele Akinbode & Tobi Michael Bolarinwa, 2020. "Effect of Foreign Aid on Human Development in Sub-Saharan Africa:A System GMM Approach," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 18(1), pages 19-38.
    8. Nada Karaman Aksentijević & Zoran Ježić & Petra Adelajda Zaninović, 2021. "The Effects of Information and Communication Technology (ICT) Use on Human Development—A Macroeconomic Approach," Economies, MDPI, vol. 9(3), pages 1-12, September.
    9. Kar, Ashim Kumar, 2016. "Aid and Human Development: Is There A Role for Good Policy Environment?," MPRA Paper 95433, University Library of Munich, Germany, revised 2018.
    10. Ahmad Saad Gillani & Durdana Qaiser Gillani, 2023. "Sector Specific Aid Inflow, Institutional Quality and Human Development in Selected Developing Countries," Journal of Economic Impact, Science Impact Publishers, vol. 5(1), pages 64-68.

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