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1 – 10 of over 27000Vincent Konadu Tawiah, Evans John Barnes, Prince Acheampong and Ofori Yaw
This paper has examined the effectiveness of foreign aid on Ghanaian economy under different political regimes.
Abstract
Purpose
This paper has examined the effectiveness of foreign aid on Ghanaian economy under different political regimes.
Design/methodology/approach
Using vector error correction and co-integration models on the annual data set over a period of 35 years, the authors demonstrate that foreign aid has had varied impacts on economic growth depending on the political ideology of the government in power.
Findings
With capitalist political philosophy, foreign aid improves private sector growth through infrastructural development. On the other hand, a government with socialist philosophy applies most of its foreign aid in direct social interventions with the view of improving human capital. Thus, each political party is likely to seek foreign aid/grant that will support its political agenda. Overall, the results show that foreign aid has a positive impact on the growth of the Ghanaian economy when there is good macroeconomic environment.
Practical implications
This implies that the country experiences economic growth when there are sound economic policies to apply foreign aid.
Originality/value
The practical implication of the findings of this paper is that donor countries and agencies should consider the philosophy of the government in power while granting aid to recipient countries, especially in Africa. The results are robust to different proxies and models.
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The purpose of this paper is to provide an overview of similarities and distinctions between development and educational assistance in the USA as compared with other countries…
Abstract
Purpose
The purpose of this paper is to provide an overview of similarities and distinctions between development and educational assistance in the USA as compared with other countries, this paper provides a general review of relevant materials on US foreign aid.
Design/methodology/approach
The paper reviews published books and articles as well as US government budget and Congressional reporting materials and Organization for Economic Cooperation and Development statistics.
Findings
Beginning with the Marshall Plan following Second World War, the USA has always been a leader in foreign aid. In many ways, US development agencies resemble counterparts in other countries – foreign aid is part of larger network of bilateral relationships, funding requests must compete with requests from other sectors, etc. In other ways, the US stands apart. Because of US Congressional reporting requirements and for philosophical reasons, the US has been reluctant to join other countries in provision of budgetary support. The US coordinates its work with host country governments, but generally organizes its activities in project mode, relying largely on US contractors. The US Agency for International Development and the Department of State are the largest US government development agencies. Still, unlike other donors, development funding and technical assistance is provided by up to 25 agencies with relatively little coordination. US foreign aid has always included a security as well as humanitarian and development dimensions. In recent years, as development assistance is increasingly coordinated with diplomacy and defense, the military dimension has been heightened. Perhaps the most original finding is the notion that public and government support of US foreign aid has required both security and development/humanitarian rationales to remain viable.
Originality/value
The paper brings together information from a range of existing sources, but provides a unique perspective on US foreign aid in education.
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Kesuh Jude Thaddeus, Chi Aloysius Ngong, Njimukala Moses Nebong, Akume Daniel Akume, Jumbo Urie Eleazar and Josaphat Uchechukwu Joe Onwumere
The purpose of this paper is to examine key macroeconomic determinants on Cameroon's economic growth from 1970 to 2018.
Abstract
Purpose
The purpose of this paper is to examine key macroeconomic determinants on Cameroon's economic growth from 1970 to 2018.
Design/methodology/approach
Data were obtained from the World Development Indicators and applied on time series data econometric techniques. The auto-regressive distributed lag (ARDL) bounds model analyzed the data since the variables had different order of integration.
Findings
The results showed long and short runs’ positive and significant connection between economic growth in Cameroon and government expenditure; trade openness, gross capital formation and exchange rate. Human capital development, foreign aid, money supply, inflation and foreign direct investment negatively and significantly affected economic growth in the short and long-runs. Hence, the macroeconomic indicators are not death.
Research limitations/implications
The present research paper has tried to capture the impact of nine macroeconomic determinants on economic growth such as the government expenditure (LNGOVEXP), human capital development (LNHCD), foreign aids (AID), trade openness (LNTOP), foreign direct investment (LNFDI), gross capital formation (INVEST), broad money (LNM2), official exchange rate (LNEXHRATE) and Inflation (LNINFLA). However, these variables have the tendency to affect each other in a unidirectional or bidirectional manner. Further, the present research paper is unable to capture the impact of other macroeconomic variable due to the unavailability of data.
Practical implications
The study recommends that Cameroon should use proper planning and strategic policy interventions to achieve higher sustainable economic growth with human capital development, foreign aid, money supply, foreign direct investment and moderate inflation.
Social implications
Macroeconomic indicators, if managed well, increase economic growth.
Originality/value
This paper to the best of the researcher's knowledge presents new background information to both policymakers and researchers on the main macroeconomic determinants using econometric analysis.
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This paper examines the relationship between foreign aid, institutional democracy and poverty. The paper explores the direct effect of foreign aid on poverty and quantifies the…
Abstract
Purpose
This paper examines the relationship between foreign aid, institutional democracy and poverty. The paper explores the direct effect of foreign aid on poverty and quantifies the facilitating role of democracy in harnessing foreign aid for poverty reduction in Sub-Saharan Africa (SSA).
Design/methodology/approach
The paper attempts to address the endogenous relationship between foreign aid and poverty by employing the two-stage least squares instrumental variable (2SLS-IV) estimator by using GDP per capita of the top five Organization for Economic Co-operation and Development (OECD) countries sending foreign aid to SSA countries scaled by the inverse of the land area of the SSA countries to stimulate an exogenous variation in foreign aid and its components. The initial level of democracy is interacted with the senders’ GDP per capita to also instrument for the interaction terms of democracy, foreign aid and its components.
Findings
The results suggest that foreign aid reduces poverty and different components of foreign aid have different effects on poverty. In particular, multilateral source and grant type seem to be more significant in reducing poverty than bilateral source and loan type. The study further reveals that democratic attributes of free expression, institutional constraints on the executive, guarantee of civil liberties to citizens and political participation reinforce the poverty-reducing effects of aggregate foreign aid and its components after controlling for mean household income, GDP per capita and inequality.
Research limitations/implications
The methodological concern related to modeling the effects of foreign aid on poverty is endogeneity bias. To estimate the relationship between foreign aid, democracy and poverty in SSA, this paper relies on a 2SLS-IV estimator with GDP per capita of the top five aid-sending OECD countries scaled by the inverse of land area of the SSA countries as an external instrument for foreign aid. The use of the five top OECD's Development Assistance Committee (OECD-DAC) countries is due to the availability of foreign aid data for these countries. However, non-OECD-DAC countries such as China and South Africa may be important source of foreign aid to some SSA countries.
Practical implications
The findings further suggest that the marginal effect of foreign aid in reducing poverty is increasing with the level of institutional democracy. In other words, foreign aid contributes more to poverty reduction in countries with democratic dispensation. This investigation has vital implications for future foreign aid policy, because it alerts policymakers that the effectiveness of foreign aid can be strengthened by considering the type and source of aid. Foreign aid and quality political institution may serve as an important mix toward the achievement of the Sustainable Development Goals 2030 and the Africa Union Agenda 2063.
Social implications
As the global economy faces economic and social challenges, SSA may not be able to depend heavily on foreign partners to finance the region's budget. There is the need for African governments to also come out with innovative ways to mobilize own resources to develop and confront some of the economic challenges to achieve the required reduction in poverty. This is a vision that every country in Africa must work toward. Africa must think of new ways of generating wealth internally for development so as to complement foreign aid flows and also build strong foundation for welfare improvement, self-reliance and sustainable development.
Originality/value
This existing literature does not consider how democracy enhances the foreign aid and poverty relationship. The existing literature does not explore how democracy enhances grants, loans, multilateral and bilateral aid effectiveness in reducing poverty. This paper provides the first-hand evidence of how institutional democracy enhances the poverty-reducing effects of foreign aid and its components. The paper uses exogenous variation in foreign aid to quantify the direct effect of foreign aid and its components on poverty.
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Teresa C. Smith and Patricia L. Nemetz
This paper sets out to describe several contemporary models of social entrepreneurship, along with the historical context of African nations typically receiving aid. It also seeks…
Abstract
Purpose
This paper sets out to describe several contemporary models of social entrepreneurship, along with the historical context of African nations typically receiving aid. It also seeks to critique three aid‐providing sectors – i.e. charity, government, and social entrepreneurship – with benefits and to explore the limits of each. It also aims to explore the perceptions of aid recipients in an East African village to determine their views of social entrepreneurship compared with other types of foreign aid.
Design/methodology/approach
Open‐ended interviews were conducted with village elders to establish an exploratory research foundation.
Findings
In general, village leaders were more favorable to social entrepreneurship efforts because they offered the possibility of self‐reliance and sustainability over time. Large government foreign aid largesse rarely reached villagers, so had little effectiveness in relieving their poverty.
Research limitations/implications
Several limitations are evident with the case study method used for the research. Future research is necessary to transfer the findings of the study to larger population segments, other organizations, and other national groupings. Expanded research methodologies, based on theoretical development and quantitative methods, will be required to further enhance the findings. Thus, the research is limited in both methodology and sampling population. The efficacy and limitations of various models of social entrepreneurship must also be tested for effectiveness, scope, scale, and sustainability. Comparative research would lend credibility to the findings.
Practical implications
The research findings suggest that villagers are generally more positive about local efforts compared with larger government projects, which rarely had a visible, significant impact on the villagers' lives. Leaders and villagers will continue partnerships that develop their businesses with the intention of providing for the social good of the community. Practical programs that develop marketing activities targeted to the specific goal of the business model would be an important step in furthering the goals of each model. For example, developing investment capital markets may require more advertising and promotion to raise awareness of their existence among potential donors. Additionally, local entrepreneurs involved in a social program may benefit from marketing education that enhances knowledge of customer needs and product development.
Originality/value
Because of the difficulties in establishing large research programs abroad, as well as in gaining the trust of local populations on a short‐term basis, the interviews represent a meaningful first step in understanding perceptions about social entrepreneurship and larger foreign aid programs.
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Moheddine Younsi, Hasna Khemili and Marwa Bechtini
The purpose of this paper is to examine the relationship between foreign aid and income inequality (IIQ) reduction for 16 African countries using unbalanced panel data covering…
Abstract
Purpose
The purpose of this paper is to examine the relationship between foreign aid and income inequality (IIQ) reduction for 16 African countries using unbalanced panel data covering the period 1990–2011. This paper attempts to answer the critical question: does foreign aid lead to IIQ reduction?
Design/methodology/approach
To examine the effect of foreign aid on IIQ, this paper uses an RE model with robust OLS regression and system-GMM estimator, which are useful in dealing with the endogeneity problems.
Findings
Results of RE model indicate that foreign aid, foreign direct investment, trade openness as well as corruption have a positive and statistically significant effect on IIQ. Government spending and inflation have a negative and statistically significant effect on IIQ, while GDP per capita growth has a negative but statistically insignificant relationship with IIQ. The results are robust by using system-GMM dynamic panel model which confirms that the coefficients of all considered variables remain same sign and significance.
Research limitations/implications
This study implies that an increase in foreign aid is associated with an increase in IIQ. As an effective strategy to foreign aid, this paper suggests that improving of financial sector development, and institutional quality and policies can reduce income inequalities and stimulate economic growth.
Originality/value
This paper is the first of its kind to empirically explore the relationship between IIQ and foreign aid measured here by net aid transfers as a share of GDP in African countries, using modern econometric techniques, time period and a variety of control variables.
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Keywords
On January 18, a Gallup study found that global approval of US leadership had fallen to 30%, a record low, down from 48% in 2016 and 1 percentage point behind China; Germany has…
Details
DOI: 10.1108/OXAN-DB229384
ISSN: 2633-304X
Keywords
Geographic
Topical
Olumide Olusegun Olaoye, Oluwatosin Odunayo Eluwole and Faraz Lakhani
The purpose of this study is to examine the effect of foreign capital inflows on economic growth in 15 Economic Community of West African States (ECOWAS) countries over the period…
Abstract
Purpose
The purpose of this study is to examine the effect of foreign capital inflows on economic growth in 15 Economic Community of West African States (ECOWAS) countries over the period 2008–2018. Specifically, this paper investigates whether selected foreign capital inflows, namely, foreign debt, foreign aid and foreign direct investments substitute or complement government spending in ECOWAS.
Design/methodology/approach
The study adopts the two-step system generalized method of moments (GMM) method of estimation to address the problem of dynamic endogeneity inherent in the relationship.
Findings
The result shows that foreign capital inflows into ECOWAS region have not transmitted into economic growth in the region. Further, the findings reveal that foreign capital inflows to ECOWAS have substituted for government spending. The results might be as a result of the high level of corruption in ECOWAS. The results also show that when institutional quality is interacted with foreign capital inflows, the result shows a negative and statistically significant effect on economic growth.
Originality/value
Unlike previous studies which pooled both developed and developing economies together, the authors investigate this relationship in a regional study, using ECOWAS to create a roughly optimum size. In addition, the authors adopt the GMM-system method of estimation to address the problem of dynamic endogeneity inherent in the relationship, which has largely been ignored in extant studies.
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