Increasing Foreign Aid for Inclusive Human Development in Africa

Simplice Asongu, Jacinta Nwachukwu

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

In the light of evidence that poverty has been decreasing in all regions of the world with the exception of Africa, where about 45% of countries in sub-Saharan Africa did not achieve the Millennium development goal extreme poverty target, this study assesses whether increasing foreign aid improves inclusive human development. The investigation is on 53 African countries for the period 2005–2012. The empirical analysis is based on (1) the generalised method of moments (GMM) to control for persistence in inclusive human development, simultaneity and time-invariant omitted variables and (2) Instrumental Variable Tobit Regressions to control for simultaneity and the limited range in the dependent variable. The adopted foreign aid variables are: ‘humanitarian assistance’, ‘action on debt’ ‘aid for social infrastructure’, ‘aid to the productive sector’, ‘aid to the multi sector’, ‘aid for economic infrastructure’ and ‘programme assistance’. The following findings are established. From the GMM specifications, there are (1) synergy effects from ‘aid to the productive sector’ and a positive net effect from ‘programme assistance’ and (2) negative net impacts from ‘aid to social infrastructure’ and human assistance, albeit with positive marginal effects. From Instrumental Variable Tobit regressions (1) there is a synergy effect from ‘aid for economic infrastructure’ and (2) there are negative net impacts from ‘aid for social infrastructure’, ‘aid to the productive sector’ and human assistance, albeit with positive marginal effects. Policy implications are discussed.
Original languageEnglish
Pages (from-to)443–466
Number of pages24
JournalSocial Indicators Research
Volume138
Issue number2
Early online date8 Jun 2017
DOIs
Publication statusPublished - Jul 2018

Fingerprint

International Cooperation
Human Development
Poverty
Relief Work
social infrastructure
assistance
Economics
Africa South of the Sahara
synergy
poverty
infrastructure
regression
indebtedness
persistence
economics
Africa
Foreign Aid
evidence

Keywords

  • Foreign aid
  • Sustainable development
  • Africa

Cite this

Increasing Foreign Aid for Inclusive Human Development in Africa. / Asongu, Simplice; Nwachukwu, Jacinta.

In: Social Indicators Research, Vol. 138, No. 2, 07.2018, p. 443–466.

Research output: Contribution to journalArticle

Asongu, Simplice ; Nwachukwu, Jacinta. / Increasing Foreign Aid for Inclusive Human Development in Africa. In: Social Indicators Research. 2018 ; Vol. 138, No. 2. pp. 443–466.
@article{07a5f517c38643d2888e484bc9f7244d,
title = "Increasing Foreign Aid for Inclusive Human Development in Africa",
abstract = "In the light of evidence that poverty has been decreasing in all regions of the world with the exception of Africa, where about 45{\%} of countries in sub-Saharan Africa did not achieve the Millennium development goal extreme poverty target, this study assesses whether increasing foreign aid improves inclusive human development. The investigation is on 53 African countries for the period 2005–2012. The empirical analysis is based on (1) the generalised method of moments (GMM) to control for persistence in inclusive human development, simultaneity and time-invariant omitted variables and (2) Instrumental Variable Tobit Regressions to control for simultaneity and the limited range in the dependent variable. The adopted foreign aid variables are: ‘humanitarian assistance’, ‘action on debt’ ‘aid for social infrastructure’, ‘aid to the productive sector’, ‘aid to the multi sector’, ‘aid for economic infrastructure’ and ‘programme assistance’. The following findings are established. From the GMM specifications, there are (1) synergy effects from ‘aid to the productive sector’ and a positive net effect from ‘programme assistance’ and (2) negative net impacts from ‘aid to social infrastructure’ and human assistance, albeit with positive marginal effects. From Instrumental Variable Tobit regressions (1) there is a synergy effect from ‘aid for economic infrastructure’ and (2) there are negative net impacts from ‘aid for social infrastructure’, ‘aid to the productive sector’ and human assistance, albeit with positive marginal effects. Policy implications are discussed.",
keywords = "Foreign aid, Sustainable development, Africa",
author = "Simplice Asongu and Jacinta Nwachukwu",
year = "2018",
month = "7",
doi = "10.1007/s11205-017-1668-3",
language = "English",
volume = "138",
pages = "443–466",
journal = "Social Indicators Research",
issn = "0303-8300",
publisher = "Springer Verlag",
number = "2",

}

TY - JOUR

T1 - Increasing Foreign Aid for Inclusive Human Development in Africa

AU - Asongu, Simplice

AU - Nwachukwu, Jacinta

PY - 2018/7

Y1 - 2018/7

N2 - In the light of evidence that poverty has been decreasing in all regions of the world with the exception of Africa, where about 45% of countries in sub-Saharan Africa did not achieve the Millennium development goal extreme poverty target, this study assesses whether increasing foreign aid improves inclusive human development. The investigation is on 53 African countries for the period 2005–2012. The empirical analysis is based on (1) the generalised method of moments (GMM) to control for persistence in inclusive human development, simultaneity and time-invariant omitted variables and (2) Instrumental Variable Tobit Regressions to control for simultaneity and the limited range in the dependent variable. The adopted foreign aid variables are: ‘humanitarian assistance’, ‘action on debt’ ‘aid for social infrastructure’, ‘aid to the productive sector’, ‘aid to the multi sector’, ‘aid for economic infrastructure’ and ‘programme assistance’. The following findings are established. From the GMM specifications, there are (1) synergy effects from ‘aid to the productive sector’ and a positive net effect from ‘programme assistance’ and (2) negative net impacts from ‘aid to social infrastructure’ and human assistance, albeit with positive marginal effects. From Instrumental Variable Tobit regressions (1) there is a synergy effect from ‘aid for economic infrastructure’ and (2) there are negative net impacts from ‘aid for social infrastructure’, ‘aid to the productive sector’ and human assistance, albeit with positive marginal effects. Policy implications are discussed.

AB - In the light of evidence that poverty has been decreasing in all regions of the world with the exception of Africa, where about 45% of countries in sub-Saharan Africa did not achieve the Millennium development goal extreme poverty target, this study assesses whether increasing foreign aid improves inclusive human development. The investigation is on 53 African countries for the period 2005–2012. The empirical analysis is based on (1) the generalised method of moments (GMM) to control for persistence in inclusive human development, simultaneity and time-invariant omitted variables and (2) Instrumental Variable Tobit Regressions to control for simultaneity and the limited range in the dependent variable. The adopted foreign aid variables are: ‘humanitarian assistance’, ‘action on debt’ ‘aid for social infrastructure’, ‘aid to the productive sector’, ‘aid to the multi sector’, ‘aid for economic infrastructure’ and ‘programme assistance’. The following findings are established. From the GMM specifications, there are (1) synergy effects from ‘aid to the productive sector’ and a positive net effect from ‘programme assistance’ and (2) negative net impacts from ‘aid to social infrastructure’ and human assistance, albeit with positive marginal effects. From Instrumental Variable Tobit regressions (1) there is a synergy effect from ‘aid for economic infrastructure’ and (2) there are negative net impacts from ‘aid for social infrastructure’, ‘aid to the productive sector’ and human assistance, albeit with positive marginal effects. Policy implications are discussed.

KW - Foreign aid

KW - Sustainable development

KW - Africa

U2 - 10.1007/s11205-017-1668-3

DO - 10.1007/s11205-017-1668-3

M3 - Article

VL - 138

SP - 443

EP - 466

JO - Social Indicators Research

JF - Social Indicators Research

SN - 0303-8300

IS - 2

ER -