The long-run impact of foreign aid in 36 African countries: Insights from multivariate time series analysis: Long-run impact of foreign aid in African countries

Katarina Juselius, Niels Framroze Møller, Finn Tarp

Research output: Contribution to journalJournal articleResearchpeer-review

160 Downloads (Pure)

Abstract

We comprehensively analyse the long-run effect of foreign aid (ODA) on key macroeconomic variables in 36 sub-Saharan African countries from the mid-1960s to 2007, using a well-specified cointegrated VAR model as statistical benchmark. Results provide broad support for a positive long-run impact of ODA flows on the macroeconomy. In contrast, we find little evidence supporting the thesis that aid has been harmful. From a methodological point of view we highlight the importance of transparency in reporting results, especially when the hypothesis being tested differs from theoretical expectations, and we identify reasons for econometrically inadequate results in the literature. © 2013 The Department of Economics, University of Oxford and John Wiley & Sons, Ltd.
Original languageEnglish
JournalOxford Bulletin of Economics and Statistics
Volume76
Issue number2
Pages (from-to)153-184
ISSN1468-0084
DOIs
Publication statusPublished - 2014
Externally publishedYes

Keywords

  • Statistics and Probability
  • Economics and Econometrics
  • Social Sciences (miscellaneous)
  • Statistics, Probability and Uncertainty
  • C32
  • F35
  • O11

Cite this