<p>The role of foreign aid in promoting economic growth and improving the social welfare of people has been the subject of much debate among development specialists, researchers, aid donors as well as recipients in general and Cameroon in particular. In spite of this, there are only few empirical studies that investigate the contributions of foreign aid to economic growth and development in Cameroon. This study explores the impact of foreign aid to economic growth and development in Cameroon using descriptive statistics for data that spans from 1997 to 2006. The results show that foreign aid significantly contributes to the current level of economic growth but has no significant contribution to economic development. The findings imply that Cameroon could enhance its economic development by effectively managing funds from aid and by strategically strengthening anti-corruption measures.</p><p>The rest of the work is organized as follows: Chapter one consist of an introduction, chapter two is the literature review, chapter three constitute the research methodology, chapter four is the data presentation and analyses, chapter five summary of findings and recommendations and lastly chapter six conclusions,</p>

This dissertation is compiled of three chapters in determining the effect of bilateral foreign assistance on the economy of Pakistan. The effect of foreign assistance will be measured in terms of public expenditure and revenue. The factors associated in the provision of aid commitments and disbursements, and the effect of bilateral assistance on the production efficiency of Pakistan. Chapter 1 uses an aid disaggregation approach to examine the impact of different types of bilateral donors on the fiscal sector of Pakistan, an important aid recipient in recent years. The purpose of this study is to determine the impact of bilateral aid on the economy of Pakistan, from the four largest donors, which include the USA, Japan, the United Kingdom, and Germany. Time series data for the period 1972-2010 were analyzed along with an estimation of a fiscal response model following Mavrotas (2005) that combines both aid disaggregation in terms of types of aid and the treatment of endogeneity. The empirical estimation of the structural equations and reduced form equations, using nonlinear three stage least squares estimation clearly suggests the importance of the above approach for delving deeper into aid effectiveness issues. Since different bilateral donors have different effects on key fiscal variables, an impact could not be revealed if a single figure for aid were employed. While aid from Japan increases public investment, aid from the USA, the UK, and Germany appears to cause a reduction in public investment. Similarly, aid from Japan reduces public consumption, but the aid from other donors causes an increase in public consumption. In regards to tax revenue, the aid flows from the USA, the UK and Germany leads to a reduction in tax revenue, but aid flow from Japan increases tax revenue. Chapter 2 investigates the relation between aid disbursements and aid commitments from the fourteen largest donors to Pakistan, and determine the factor that effects commitments and the disbursements. The time series data was employed for the period 1972-2010. The estimation of the model through fixed effect approach and two stage least squares approach showed that aid disbursements, aid commitment from donors to African countries, and Pakistan's membership at the United Nations Security Council effects aid commitments positively and significantly. But, the inverse relation existed between GDP per capita of Pakistan and aid commitments. Similarly, aid commitments relation with the aid disbursements was positive and significant. The war in Afghanistan during any time between1972-2010 increases the aid disbursement to Pakistan. It was also determined that if the level of primary education increases, the aid disbursement to Pakistan decreases. The results also showed that when Pakistan is ruled by the military government the aid disbursements to Pakistan reduces. Chapter 3 focus is to see the impact of different bilateral donors on the production inefficiency of the Pakistan. To empirically estimate the effect of bilateral aid heterogeneity on production inefficiency, we use the time series data for Pakistan for the period 1972-2010. The stochastic frontier analysis was conducted using maximum likelihood estimation. The results determined that the aid from the United Kingdom (UK) and Germany tends to increase production efficiency of Pakistan. However on the contrary aid from Japan tends to decrease production efficiency. It was also concluded from the results that foreign direct investment and public investment also increases production efficiency. But, the relation between human capital and production efficiency was negative. Also, the results indicated that when Pakistan is ruled by the military government the aid flows from the USA and UK reduces production efficiency.

This dissertation presents three essays on foreign aid effectiveness. Chapter 1 presents the role of monitoring procedures in improving the effectiveness of foreign aid. It analyzes how monitoring procedures influence the government’s effort and improve the effectiveness of foreign aid. The chapter considers two cases, the case in which the donor has unrestricted aid budget and the case where the donor has a fixed aid budget. The main concern in this chapter is determining the optimal contract for the donor that maximizes the effectiveness of the aid given her aid budget when she dealing with aid-recipients in the presence of moral hazard problem. The model analyzes the monitoring procedures between two players, donor and recipient in a one-shot game. It assumes that the decision to monitor and the choice of the recipient's action are taken simultaneously. It suggests that with a fixed aid budget the donor is unlikely to invest heavily in monitoring cost and reward payment since the primary purpose of such aid is to help the poor in the recipient country. The reward payment which provides incentives for the recipient to work does indeed have a stronger effect on the likelihood of project success. It also shows that both the probability of monitoring and the optimal reward respond differently to change in monitoring cost. Chapter 2 studies the effect of aid-recipient governance on the allocation of foreign aid. It examines the hypothesis that better governance can reduce aid transaction cost which increases the assistance received by developing countries. The following questions were the main concern of this chapter, does better governance increase the amount of foreign aid delivered to developing countries? Do donors consider the levels of recipient’s governance when they allocate their funding? The chapter adopts annual data on a group of 67 developing countries covering Africa, and South Asia for the period from 2003 to 2014. It shows a positive relationship between two of our six governance indicators and the quantity of foreign aid. In fact, only control of corruption and voice and accountability have statistically significant effect on the amount of aid. It also shows that control variables have important effect in the determinate of foreign aid expect GDP per capita. Chapter 3 studies the impact of aid-recipient governance on aggregate welfare in developing countries. It investigates whether the effect of foreign aid on human development depends on the level of governance in recipient countries. These relationships are explored in an econometric analysis, 2SLS estimation, of panel data for the period from 2003 to 2014 in a sample of 67 developing countries. Our hypothesis is that better governance provides a better environment for foreign aid donor to achieve their goals. The main findings show that aid has a positive impact on human development only when it interacts with two out of the six indicators of governance: control of corruption and political stability. Aid by itself and military expenditures have a negative impact on the human development index.

This study examines the poverty focus of Swedish bilateral aid and if a multidimensional poverty measure has an effect on the selection of Swedish strategy countries within Sida’s bilateral aid program. Sweden, while generally seen as an altruistic donor, has been noted to allocate resources to relatively richer countries as a result of its wider aim with ODA such as democratic progress and human rights protection. To analyze the relationship between Swedish bilateral aid and poverty, we use concentration curves and a logistic regression for the year of 2016 for Sweden’s strategy countries. The regressions are performed using two measures of poverty, the Multidimensional Poverty Index and extreme monetary poverty (1.9$/day), controlling for institutional and strategic factors. The results for Sweden’s bilateral aid program show a slight poverty focus in terms of multidimensional poverty, as well as tendencies to focus on consistency, geopolitics and comparative advantages. There is no significant relationship between strategy countries and degree of monetary poverty. The results are largely aligned with Swedish policy objectives.

The thesis discusses economic development and fight against poverty in Kenya.The aim is to prove that the development assistance is not the the main incentive for the economic development in Kenya and the kenyan government should focus on alternative development paths. The paper tries to analyze development assistance and to find arguments against it, describes other forms of capital inflow, such as foreign trade, foreign investment and microfinance. The first chapter defines the basic concepts and puts the arguments for and against development aid. The second chapter discusses alternative paths of development. In the third chapter the paper starts with the analytical section where political and economic situation in Kenya, development aid and business environment are analyzed. The importance of foreign trade, foreign investment and microfinance is demonstrated. The last chapter analyzes the selected microfinance institutions in Kenya and it contains a case study from the field.

MAIR / Department of Development Studies / Development Aid has often has been used as a tool and written about where in by developed states dominated African countries during the colonial rule to maximize their countries economy by means of exporting raw materials from Africa to Europe meanwhile the majority of Africans living in poverty. However, the role of USAID towards South Africa’s development has attracted little study so far. Into today’s politics country states interact in a political arena to formulate bilateral relations. Since the adoption of independent in 1994 South Africa is still facing challenges of socio economic development such as lack of health care facilities, poor education, and high rate of unemployment, lack of infrastructures and lack of good governance. This work investigates the role of the USAID towards the development of South African government. Issue to be examined is the bilateral relations of US-SA for SA socio economic development. / NRF

This thesis investigates the effect of foreign aid on income inequality, and studies the impact in Latin America during the time period from 1960 to 2020. The method employed is a pooled ordinary least squares (OLS) model, using fixed effects. The results imply that foreign aid increases income inequality. The theoretical literature on this topic focus mostly on foreign aid’s effect on economic growth, and growth is thought to lessen income inequality. Aid is on the other hand considered to raise income inequality due to misappropriation of aid by the political and local elite in recipient countries. Negative impacts of aid are also viewed as the result of low accountability of both donors and recipients of aid. Empirical studies examining the impact of foreign aid on income inequality are furthermore scarce compared to aid’s impact on economic growth, and the results of existing studies are inconclusive, where most discover either weak positive or negative effects.

The role of foreign aid in promoting economic growth and improving the social welfare of people has been the subject of much debate among development specialists, researchers, aid donors as well as recipients in general and Cameroon in particular. In spite of this, there are only few empirical studies that investigate the contributions of foreign aid to economic growth and development in Cameroon. This study explores the impact of foreign aid to economic growth and development in Cameroon using descriptive statistics for data that spans from 1997 to 2006. The results show that foreign aid significantly contributes to the current level of economic growth but has no significant contribution to economic development. The findings imply that Cameroon could enhance its economic development by effectively managing funds from aid and by strategically strengthening anti-corruption measures. The rest of the work is organized as follows: Chapter one consist of an introduction, chapter two is the literature review, chapter three constitute the research methodology, chapter four is the data presentation and analyses, chapter five summary of findings and recommendations and lastly chapter six conclusions,

During the 1970s and 1980s, developing countries, skeptical of foreign investment, imposed several barriers on entry of foreign capital. However, the late 1980s and 1990s marked the onset of globalization, which integrated the whole world into a single global economy. The once-conservative developing nations, realizing the multifarious benefits of foreign direct investment (FDI), began encouraging entry of foreign firms, using various incentives, such as tax holidays, production subsidies, cash grants, labor training grants, and import duty exemptions. Gradually, FDI and foreign aid became two very important sources of foreign capital for these capital-constrained economies. This dissertation is focused on studying if there is any kind of relationship between foreign aid and private investment in recipient countries. FDI is a decision made by foreign investors on the basis of profitability of investment, whereas foreign aid is a political decision made by governments of donor countries on the basis of need for financial assistance by developing countries. We model foreign aid as an exogenous factor in allocation of foreign direct investment, along with other variables, to estimate the effect of aid on investment. Among the factors affecting FDI, infrastructure is considered to be an important one, in allocation of funds across developing countries. This dissertation is arranged as follows. In chapter 2, we introduce the term ``socioeconomic'' infrastructure and create an index, by combining several components of infrastructure, using the multivariate technique of principal components. Prior to creating the index, we employ the technique of multiple imputation to deal with missing data. Our measure of socioeconomic infrastructure contains elements of physical infrastructure, such as transportation facilities, telecommunication facilities, consumption demand for energy and electricity, as well as social infrastructure components, such as voice and accountability, political stability and the absence of violence and terrorism, rule of law, control of corruption, government effectiveness, and regulatory quality. In chapter 3, we develop a theoretical model to address the research question: Does foreign aid impede or encourage foreign direct investment in developing nations? Our theory demonstrates that foreign aid used by the recipient country in financing a public input (known as development aid) encourages foreign direct investment. We also empirically address the same issue by modeling foreign aid as a determinant of foreign direct investment, along with a host of other factors, including our computed index of socioeconomic infrastructure. Our analysis shows that public consumption aid (foreign aid used for financing consumption expenses) does crowd out private investment in current account surplus developing countries, whereas development aid crowds in private investment in the presence of sound macroeconomic, political, legal, and administrative machineries. In chapter 4, we build a panel econometric model to explain the factors underlying socioeconomic infrastructure in developing countries. Our results indicate that countries with higher per capita income, a prominently large government, high investment demand, and large government revenue tend to have better infrastructure.

This paper is a study of the effects of foreign aid on perceptions of political corruption in Sub-Saharan Africa. In keeping with the consensus on foreign aid effectiveness, this study proposed that Sub-Saharan African countries receiving more foreign aid would be more likely to maintain high levels of perceived corruption. Hypotheses were tested using multivariate regression, controlling for a number of factors which have shown to be influential on perceptions of political corruption. Two models were tested, one to show the regression over a period of nine years, and the other to show the relationship between the foreign aid and perceptions of corruption over one year. The tests resulted in showing a significantly negative relationship over nine years, but foreign aid lost its significance with perceptions of political corruption over one year. The most influential variable on political corruption in both models was the level of political rights in a country, which indicated a significantly negative relationship between the two variables. The paper also looked at Nigeria in a case study focusing on the effects of foreign aid on governance and economic policy environments, corruption being a major factor in both of these. This study resulted in the conclusion that increases in foreign aid paralleled improved perceptions of political corruption, and that Nigeria's reform initiative during the Obasanjo regime (1999-2007) was the major determining factor in this perception shift. Overall, this study supports the consensus that foreign aid given to countries with reform-minded governments is more likely to contribute to the fight against corruption.