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Official Development Assistance, Governance and Economic Growth: What are the implications for Sub-Saharan Africa?

Douzounet Mallaye, Université de Yaoundé II

This study analyzes the effectiveness of foreign aid on economic growth of a sample of sub-Saharan African countries. Specifically, we evaluate governance in its technical and democratic dimension, as a relevant channel through which foreign aid affects growth. Thus, using panel data during the 1995-2005 periods, we estimate a structural simultaneous equations model. Our results show that although foreign aid positively impacts growth, only the democratic governance constitutes a valid transmission channel.