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Linking Foreign Aid, Economic Growth and Economic Complexity

Wiklander, Simon LU (2024) EKHS21 20241
Department of Economic History
Abstract
This thesis documents how foreign aid is associated with economic growth and brings a novel perspective by examining how the association depends on economic complexity. By linking the deviations between income and complexity that predict future growth to different relative stocks of knowhow, embodied and codified knowledge between countries, I argue that foreign aid needs to be tailored to variations in contexts of productive knowledge. Foreign aid is studied at the bilateral, modality and sectoral levels through multiple linear regression analysis, using a sample of 27 Sub-Saharan African countries between 2002-2021. The main findings are 1) that the negative association of aid for knowhow, through education, is mitigated in countries... (More)
This thesis documents how foreign aid is associated with economic growth and brings a novel perspective by examining how the association depends on economic complexity. By linking the deviations between income and complexity that predict future growth to different relative stocks of knowhow, embodied and codified knowledge between countries, I argue that foreign aid needs to be tailored to variations in contexts of productive knowledge. Foreign aid is studied at the bilateral, modality and sectoral levels through multiple linear regression analysis, using a sample of 27 Sub-Saharan African countries between 2002-2021. The main findings are 1) that the negative association of aid for knowhow, through education, is mitigated in countries where knowhow is scarce and 2) that the positive association of aid for embodied and codified knowledge, through energy, is amplified in countries where such knowledge is scarce. In this way, adding another dimension to which aid needs to be tailored to be effective. (Less)
Please use this url to cite or link to this publication:
author
Wiklander, Simon LU
supervisor
organization
course
EKHS21 20241
year
type
H1 - Master's Degree (One Year)
subject
keywords
Economic Complexity, Foreign Aid, Economic Growth, Productive Knowledge, Aid Effectiveness, Bilateral, Technical Cooperation, Education, Energy, Knowhow
language
English
id
9162968
date added to LUP
2024-06-18 07:52:26
date last changed
2024-06-18 07:52:26
@misc{9162968,
  abstract     = {{This thesis documents how foreign aid is associated with economic growth and brings a novel perspective by examining how the association depends on economic complexity. By linking the deviations between income and complexity that predict future growth to different relative stocks of knowhow, embodied and codified knowledge between countries, I argue that foreign aid needs to be tailored to variations in contexts of productive knowledge. Foreign aid is studied at the bilateral, modality and sectoral levels through multiple linear regression analysis, using a sample of 27 Sub-Saharan African countries between 2002-2021. The main findings are 1) that the negative association of aid for knowhow, through education, is mitigated in countries where knowhow is scarce and 2) that the positive association of aid for embodied and codified knowledge, through energy, is amplified in countries where such knowledge is scarce. In this way, adding another dimension to which aid needs to be tailored to be effective.}},
  author       = {{Wiklander, Simon}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Linking Foreign Aid, Economic Growth and Economic Complexity}},
  year         = {{2024}},
}