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Aid Fragmentation and Aid Effectiveness in Sub-Saharan Africa

Senadza, Bernardin ; Addison, Richmond and Duodu, Albert LU (2024) In Review of Development Finance 14(1). p.40-56
Abstract

This paper examines the effect of aid fragmentation on the aid-growth nexus in Sub-Saharan Africa from 1990-2017. Aid fragmentation is measured by both the concentration index (Herfindahl index and ratio of contribution by largest three donors) and donor counts (total number of donors and number of small donors). We find a significant negative effect of aid fragmentation on the effectiveness of aid to stimulate economic growth based on the concentration index. We did not find any significant relationship between aid fragmentation and aid effectiveness when we employed the instrumental variable approach. The results point to a positive impact of the economic policy environment in the recipient countries on economic growth. The policy... (More)

This paper examines the effect of aid fragmentation on the aid-growth nexus in Sub-Saharan Africa from 1990-2017. Aid fragmentation is measured by both the concentration index (Herfindahl index and ratio of contribution by largest three donors) and donor counts (total number of donors and number of small donors). We find a significant negative effect of aid fragmentation on the effectiveness of aid to stimulate economic growth based on the concentration index. We did not find any significant relationship between aid fragmentation and aid effectiveness when we employed the instrumental variable approach. The results point to a positive impact of the economic policy environment in the recipient countries on economic growth. The policy environment and the level of aid fragmentation in the recipient countries are found to have a combined positive moderating effect on the aid-growth nexus.

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Please use this url to cite or link to this publication:
author
; and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Aid effectiveness, Aid fragmentation, Sub-Saharan Africa
in
Review of Development Finance
volume
14
issue
1
pages
17 pages
publisher
AfricaGrowth Institute
external identifiers
  • scopus:85195467307
ISSN
1879-9337
language
English
LU publication?
yes
id
f7683c04-6860-43c9-9557-c64d2c36c19d
date added to LUP
2024-08-21 15:23:47
date last changed
2025-04-04 14:23:05
@article{f7683c04-6860-43c9-9557-c64d2c36c19d,
  abstract     = {{<p>This paper examines the effect of aid fragmentation on the aid-growth nexus in Sub-Saharan Africa from 1990-2017. Aid fragmentation is measured by both the concentration index (Herfindahl index and ratio of contribution by largest three donors) and donor counts (total number of donors and number of small donors). We find a significant negative effect of aid fragmentation on the effectiveness of aid to stimulate economic growth based on the concentration index. We did not find any significant relationship between aid fragmentation and aid effectiveness when we employed the instrumental variable approach. The results point to a positive impact of the economic policy environment in the recipient countries on economic growth. The policy environment and the level of aid fragmentation in the recipient countries are found to have a combined positive moderating effect on the aid-growth nexus.</p>}},
  author       = {{Senadza, Bernardin and Addison, Richmond and Duodu, Albert}},
  issn         = {{1879-9337}},
  keywords     = {{Aid effectiveness; Aid fragmentation; Sub-Saharan Africa}},
  language     = {{eng}},
  number       = {{1}},
  pages        = {{40--56}},
  publisher    = {{AfricaGrowth Institute}},
  series       = {{Review of Development Finance}},
  title        = {{Aid Fragmentation and Aid Effectiveness in Sub-Saharan Africa}},
  volume       = {{14}},
  year         = {{2024}},
}