International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

Is Aid Really Dead? Evidence from Sub-Saharan Africa
Adeyemi A. Ogundipe, Paul Ojeaga, Oluwatomisin M. Ogundipe

This study examined the relationship between foreign aid and economic development in Sub-Saharan Africa. The study seeks to examine the role of macroeconomic policy in aid effectiveness in SSA countries by adopting a theoretical framework similar to the Endogenous/New Growth model and the System Generalized Method of Moments (GMM) technique of estimation in attempt to overcome the challenge of endogeneity perceived in the institution variables and aid-growth nexus. It was observed that foreign aid does not significantly influenced Real GDP Per Capita in Sub-Saharan Africa, but the relation reverses after controlling for the role of economic policy; though the response of real GDP per capita tends to be infinitely inelastic. Subsequently, capital stock, labour force, institutional quality and human capital meaningfully contributed to economic development in SSA.

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