Ojeaga, Paul (2012): Foreign Aid and African Exporters: Help or Harm?
Preview |
PDF
MPRA_paper_55564.pdf Download (142kB) | Preview |
Abstract
Export growth is pursued by many developing countries as a path to economic prosperity. Consistent with this goal, many foreign donors have attempted to use aid to promote African exporters. The relationship between foreign aid and exports is a complex one as aid comes from different sources and has varied destinations in the recipient country. In this paper, we utilize a panel data set of African countries from 1970-2008 to examine the impact of foreign aid on exports. The results find that aid designated for sectors such as infrastructure and education have a positive impact on exports while those going to agriculture and industry do not. Results also show that both multilateral and bilateral aid has a positive impact on exports. Also, less concessionary official development assistance does at least as well, if not better, in boosting exports as does more grant-based effective development assistance. There is significant evidence that natural resources and foreign aid are being viewed by donors, and functioning, as complements. Evidence finds that sound economic policy by the recipient to be an important factor in export growth and that better policy can act as a substitute for foreign aid. These results suggest the important of properly directing aid to the right sectors and promoting sound economic policies by recipient countries.
Item Type: | MPRA Paper |
---|---|
Original Title: | Foreign Aid and African Exporters: Help or Harm? |
English Title: | Foreign Aid and African Exporters: Help or Harm? |
Language: | English |
Keywords: | Keywords: Foreign Aid, Exports, Natural Resources, Africa |
Subjects: | F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy |
Item ID: | 55564 |
Depositing User: | paul ojeaga |
Date Deposited: | 01 May 2014 04:32 |
Last Modified: | 05 Oct 2019 15:16 |
References: | Baltagi, B.H. 2005.Econometric Analysis of Panel Data.3rd edition. New York: John Wiley and Sons. Baltagi, B.H., and Wu, P.X. 1999. “Unequally Spaced Panel Data Regressions with AR(1) Disturbances.” Econometric Theory, 15:814-823. Boone, P. 1994. The impact of foreign aid on savings and growth. Mimeo, London School of Economics. Boone, P. 1996. “Politics and the effectiveness of foreign aid.”European Economic Review, 40:289–329. Bourguignon F. and Sundberg M. 2008 “Aid Effectiveness – Opening the Black Box”.American Economic Review, 97(2) pp. 316 – 321 Burnside C. and Dollar D., 2000.“Aid, Policies and Growth”.American Economic Review, 90 (4), pp. 847 - 868. Cali, M. and D. W. Velde. 2011. “Does Aid For Trade Really Improve Trade Performance?”,World Development, 39(5):725-740. Central Intelligence Agency.2011. CIA World Factbook, 2011.Accessed online February 11, 2012 at http://cia.gov/library/publications/the-world-factbook. Chang, C. C.; Fernandez-Arias, E., and Serven, L. 1999.Measuring Aid Flows: A New Approach. Washington: World Bank, Development Economics Research Group. Clemens, M.A.; C.J. Kenny & T.J. Moss. 2004. The trouble with the MDGs: confronting expectations of aid and developments success. Working Papers no. 40. Center for Global Development. De Long, B. and B.Eichengreen.1991. “The Marshall Plan: History of the Most Successful Structural Adjustment Program”, NBER Working Paper 3899. De Renzio, Paolo. 2006. “Aids, Budgets and Accountability: A Survey Article” Development Policy Review, 24(6): 627-645. Douclouliagos H. and Paldam M., 2007 “A meta-analysis of development aid allocation: The effects ofIncome level and population size” University of Arhus Denmark Working Paper. Djankov et al., 2006. “Does Foreign Aid Help?” Cato Journal, 26 (1): 1-28. Easterly W., 2003. “Can Foreign Aid Buy Growth?” Journal of Economic Perspective 17 (3) pp. 23 – 48 EconomyWatch. 2010. Africa Economy, accessed online February 28, 2012 at http://www.economywatch.com/world_economy/africa/ Gormanee, K., Morrissey, O., Mosley, P. and A.Verschoor. 2003. “Aid,Pro-Poor Government Spending, and Welfare.”CREDIT Research Paper.No 03/03. Jempa, C.1991. The Tying of Aid, OECD Development Center, Paris Jensen, T.M. 2008. How Does Aid Work? A Literature Review of Aid Effectiveness and Welfare Studies.DIIS Working Paper, 2008/29. Johnson, H. G. 1967. Economic Policies toward Less Developed Countries.Washington: Brookings Institution. Karingi, S.N. and V. Leyaro. 2009. “Monitoring Aid for Trade in Africa: An Assessment of the Effectiveness of the Aid for Trade.” African Trade Policy Centre, Working Paper No.83. Knack S., 2001. “Aid Dependence And The Quality of Governance: Cross Country Empirical Test”. Southern Economic Journal McPherson, M.F. and T. Rakovski. 2001. “Understanding the Growth Process in Sub-Saharan Africa: Some Empirical Estimates,” African Economic Policy Discussion Paper. Morrissey O., Osei R., McGillvray M., Lloyd T., 1992. “Investigating the Relationship between Aid and Trade Flows”. A CREDIT (Centre for Research in Economic Development and International Trade) Research Paper, 38 (10), pp Morrissey O., Osei R., Lloyd T., 2004. “The Nature of Aid and Trade Relationships”. European Journal of Economic Research, 16 (2), pp. 354 -374. Mosley P., Hudson J., Vershoor A., 2004. “Aid Poverty Reduction and The New Conditionality”. The Economic Journal, 114(496), pp. 217- 243. Osborne E., 2002. “Rethinking Foreign aid” Cato Journal. 22(2): 297-316. Pettersson J., 2004. “Foreign Sectoral Aid Fungibility, Growth, and Poverty Reduction”.Journal of Economic Literature, 68(2), pp. 310- 329 Svensson J., 2000. “When Is Foreign Aid Policy Credible? Dependence and Conditionality” Journal of Development Economics, 61(2000), pp. 61- 84. Thirlwall, A. P. 1976. “When Is Trade More Valuable than Aid?” Journal of Development Studies 13: 35–41. United Nations, 2010.MDG Gap Task Force Report: The Global Partnership for Development at a Critical Juncture, United Nations: New York. Wooldridge, J.M. 2010.Econometric Analysis of Cross Section and Panel Data, MIT Press: Cambridge, MA. World Bank. 2012. World Development Indicators. Accessed online February 11, 2012 at http://data.worldbank.org. Yeats, A. 1982. “Development Assistance: Trade vs. Aid and the RelativePerformance of Industrial Countries.” World Development 10: 863–69. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/55564 |