Ethnic Fractionalisation and Aid Effectiveness
Journal
Journal of African Economies
ISSN
0963-8024
ISSN-Digital
1464-3723
Type
journal article
Date Issued
2012-01-01
Author(s)
Abstract
We test the hypothesis that the effect of foreign aid on economic growth is positive in ethnically homogenous countries, but decreasing in ethnic fractionalisation. Using panel data covering 114 aid-recipient countries over the period 1962 to 2001, and employing two-stage least squares and GMM estimation techniques, we find a strong support for this hypothesis. Our estimates suggest that foreign aid promotes growth in ethnically homogenous countries, while being ineffective or even harmful in many Sub-Saharan African countries and some ethnically fractionalised countries elsewhere.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
University Press
Publisher place
Oxford
Volume
21
Number
1
Start page
65
End page
93
Pages
29
Subject(s)
Eprints ID
234972