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

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  • Author: Juselius, Katarina

    University of Copenhagen, Denmark

  • Author: Møller, Niels Framroze

    University of Copenhagen

  • Author: Tarp, Finn

    University of Copenhagen

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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
Issue number2
Pages (from-to)153-184
Publication statusPublished - 2014
Externally publishedYes
CitationsWeb of Science® Times Cited: No match on DOI

    Research areas

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

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