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Effect of Foreign Aid on Human Development in Sub-Saharan Africa:A System GMM Approach

Author

Listed:
  • Sakiru Oladele Akinbode

    (Federal University of Agriculture, Abeokuta, Nigeria)

  • Tobi Michael Bolarinwa

    (Federal University of Agriculture, Abeokuta, Nigeria)

Abstract

Using data for 47 SSA countries from 2000 to 2016, the study examined the effect of foreign aid on human development in SSA by employing the System-GMM approach, which is specifically applicable to the present case. Results revealed that aid did not affect human development in SSA, whereas, corruption was found to reduce HDI, while trade openness improved it. Validity of results was confirmed by the Arellano-Bond test for autocorrelation in the disturbance term and the Hansen and Sargan tests for the validity of instrumental variables. The study recommended effective framework for utilization of foreign aid and reduction of corruption.

Suggested Citation

  • 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.
    • Handle: RePEc:seb:journl:v:18:y:2020:i:1:p:19-38
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    File URL: http://www.asecu.gr/Seeje/issue34/issue34-akinbode-bolarinwa.pdf
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Human Development; Foreign Aid; Sub-Saharan Africa (SSA);
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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