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What is the Economic Impact of Development Aid?

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• Volume 5,Issue 3, May 2018

Year:

2018

Type of Publication:

Article

Keywords:

Economic Growth, Official Development Assistance, Cointegration Analysis

Authors:

• GEBREGERGIS, Cherkos Meaza

Journal:

IJIRES

Volume:

5

Number:

3

Pages:

331-343

Month:

May

ISSN:

2349-5219

BibTex:

@article{1287, author = "GEBREGERGIS, Cherkos Meaza", abstract = "Foreign aid inflows have grown significantly in the post-war period. Many studies have tried to assess the effectiveness of aid at the micro- and macro-level. While micro evaluations have found that in most cases aid ‘works’, those at the macro-level are ambiguous. This paper investigates the impact of foreign aid on economic growth in Ethiopia using time series data for the period 1981 to 2015. The main objective is to identify the relationship that aid has with the developmental path of the country and whether one can reasonably link outcomes to aid inputs. To this end, the study used the production function initiated by Solow-Swan model and cointegration analysis the study is able to demonstrate the existence of long-run relationship between the official development assistance and economic growth of Ethiopia. The study found that there is negative relationship between ODA and economic growth and tend to be postive in the long run ", issn = "23495219", journal = "IJIRES", keywords = "Economic Growth, Official Development Assistance, Cointegration Analysis", month = "May", note = "This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. CC BY-NC-SA 4.0 Creative Commons License: https://creativecommons.org/licenses/by-nc-sa/4.0/", number = "3", pages = "331-343", title = "{W}hat is the {E}conomic {I}mpact of {D}evelopment {A}id? ", volume = "5", year = "2018", }

Note:

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. CC BY-NC-SA 4.0 Creative Commons License: https://creativecommons.org/licenses/by-nc-sa/4.0/

Abstract:

Foreign aid inflows have grown significantly in the post-war period. Many studies have tried to assess the effectiveness of aid at the micro- and macro-level. While micro evaluations have found that in most cases aid ‘works’, those at the macro-level are ambiguous. This paper investigates the impact of foreign aid on economic growth in Ethiopia using time series data for the period 1981 to 2015. The main objective is to identify the relationship that aid has with the developmental path of the country and whether one can reasonably link outcomes to aid inputs. To this end, the study used the production function initiated by Solow-Swan model and cointegration analysis the study is able to demonstrate the existence of long-run relationship between the official development assistance and economic growth of Ethiopia. The study found that there is negative relationship between ODA and economic growth and tend to be postive in the long run

Full text: IJIRES_1287_FINAL.pdf Online version [Bibtex]