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Aid and Growth in Sub-Saharan Africa: Accounting for Transmission Mechanisms

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  • Karuna Gomanee
  • Sourafel Girma
  • Oliver Morrissey

Abstract

This paper is a contribution to the literature on aid and growth. Despite an extensive empirical literature in this area, existing studies have not addressed directly the mechanisms via which aid should affect growth. We identify investment as the most significant transmission mechanism, and also consider effects through financing imports and government consumption spending. With the use of residual generated regressors, we achieve a measure of the total effect of aid on growth, accounting for the effect via investment.

Suggested Citation

  • Karuna Gomanee & Sourafel Girma & Oliver Morrissey, 2005. "Aid and Growth in Sub-Saharan Africa: Accounting for Transmission Mechanisms," WIDER Working Paper Series RP2005-60, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:rp2005-60
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