Differences in political orientation and foreign aid utilization in Africa

Figures & data

Table 1. Brief of sample countries.

Country	Brief	Political parties in power	Ideology
Benin	Benin got independence from France in 1960. There have seven presidents in 12 elections.	Action Front for Renewal and Development – FARD 1996–2006	Leftist
		Independent 2006–2016	Rightist
Cote d'Ivoire	Cote d’Ivoire gained independence from France in 1960. There have been five presidents and from 11 elections.	Ivorian Popular Front – FPI (2000–2010)	Leftist
		Rally of the Republicans –RDR 2011–date	Rightist
Comoro Island	Comoros gained independence from France in 1975, and there have been four presidents since it formed a Union of Comoros	Convention for the Renewal of the Comoros – CRC 2002–2006 2016–till date	Rightist
		Baobab Movement – BM 2006–2011	Leftist
Cape Verde	Cape Verde gained independence from Portugal in 1975 and have had six elections since 1991.	African Party of Independence of Cape Verde – PAICV 1975–1991; 2001–2011	Leftist
		Movement of Democracy – MpD 1991–2001: 2011–date	Rightist
Ghana 1992–2017	Ghana gained independence from Britain in 1957 and had seven elections since it returned to democracy in 1992.	National Democratic Congress – NDC. 1992–2000 2009–2016	Leftist
		New Patriotic Party –NPP. 2001–2008 2017–date	Rightist
Kenya 1995–2017	Kenya gained independence from Britain in 1963 and had had 12 elections without any Military rule during the period.	Kenya African National Union. 1969–1997	Leftist
		National Rainbow Coalition 2002–2007	Leftist
		Party of National Unity 2007–2013	Leftist
		The National Alliance 2013–2016	Rightist
		Jubilee Party 2017–date	Rightist
Algeria 1994–2017	Algeria gain independence from France in 1962. There has been ten elections with serious of civil unrest.	National Liberation Front. 1978–1994 1999–2019	Leftist
		National Rally for Democracy 1994–1999, 2019–date	Rightist
Liberia	Liberia gained independence in 1847 and had had 51 elections with 25 presidents.	National Patriotic Party– NPP 1986–1990 1997–2003	Leftist
		Unity Party – UP 2006–2018	Rightist
		Congress for Democratic Change – CDC	Rightist
Lesotho	Lesotho gained independence from Britain in 1966. There have been ten elections and 11 presidents, including military regimes.	Basutoland Congress Party. 1993–1997	Leftist
		Lesotho Congress for Democracy 1997–2011	Leftist
		Democratic Congress 2011–2012 2015–2017.	Leftist
		All Basotho Convention 2012–2015 2017 to date	Rightist
Malawi	Malawi gained independence from the British in 1964 and has had five elections since then under four political parties	United Democratic Front – UDF. 1994–2004	Rightist
		Democratic Progressive Party – DPP 2004–2012 2014 – to date	Rightist
		People’s Party 2012–2014	Leftist
Mauritius 1992–2017	Mauritius gained its independence from Britain in 1968. There have been seven presidents since the country became a republic in seven elections.	Labour Party – LP 1992, 2012–2015.	Leftist
		Mouvement Militant Mauricien – MMM 1992–2002	Rightist
		Militant Socialist Movement – MSM 2002–2003 2003–2012	Leftist
Morocco	Morocco gained its independence from France in 1956, and there have been 16 presidents in ten elections.	Istiqlal Party 2007–2011	Leftist
		Justice and Development Party	Rightist
Nigeria (1997–2017)	Nigeria gained independence from the British in 1960. Nigeria has experienced a series of coups. There have been seven elections under the fourth republic.	Peoples Democratic Party – PDP 1997–2007 2007–2010 2010–2015	Rightist
		All Progressive Party – APC 2015 – Til date	Leftist
Senegal 2000–2017	Senegal gained independence from France in 1960. There have been four presidents from ten elections without any military rule.	The Socialist Party of Senegal – PSS 1980–2000	Leftist
		Senegalese Democratic Party (PDS) 2000–2012	Leftist
		Alliance for the Republic. 2012–date	Rightist
Tunisia	Tunisia gained independence from France in 1956. There have been six presidents and ten elections with civil unrest in some years.	Democratic Constitutional Rally 1999– 2004 2004–2009 2009–2011	Leftist
		Congress for the Republic	Rightist
		NidaaTounes 2011–2014	Rightist
Zambia	Zambia gained independence from Britain in 1964. There have been 13 elections and seven presidents with no military rule.	Multiparty Movement Democracy (MMD). 1991–2011	Leftist
		Patriotic Front (PF). 2011-date	Rightist

Table 2. Main regression results.

Variables	GDP		Social Index		Capital Index
	(1)	(2)	(3)	(4)	(5)	(6)
Aid	0.025* (0.021)	0.021** (1.919)	0.151** (2.191)	0.035*** (5.694)	0.095* (1.67)	0.019** (2.039)
Aid*Pol.orientation		0.015 (0.814)		0.066** (2.127)		−0.043** (−2.106)
Political orientation		0.011 (1.003)		0.023** (2.459)		−0.017* (−1.804)
Political stability	0.010 (0.009)	0.009 (0.011)	0.013 (1.231)	0.006 (0.003)	0.004 (0.27)	0.007 (0.002)
Corruption	−0.223*** (−0.123)	−0.213*** (−0.112)	−0.281** (−2.013)	−0.233*** (−2.117)	−0.215** (−2.09)	−0.257** (2.139)
Trade Openness	0.033** (0.017)	0.031** (0.017)	0.009 (0.870)	0.0314 (0.018)	0.053* (1.89)	0.0426* (1.922)
Gross capital	0.057** (0.029)	0.0633** (0.0401)	0.032 (1.503)	0.0616 0.0431	0.157*** (7.33)	0.123*** (8.820)
Inflation	−0.513*** (−5.367)	−0.562*** (−3.450)	−0.195* (−1.66)	−0.231*** (−4.102)	−0.147* (−1.90)	−0.163** (−2.263)
Foreign investment	0.037*** (3.023)	0.019** (2.047)	0.017 (0.48)	−0.014 (0.032)	0.033** (1.99)	0.036** (2.015)
Intercept	0.044*** (4.135)	0.0342*** (6.015)	0.065*** (3.09)	0.073*** (3.490)	0.129*** (9.03)	0.029*** (8.104)
Net effect	NA	NA	NA	0.0659	NA	−0.0450
Adjusted R^2	0.312	0.29	0.34	0.30	0.39	0.33
Observations	317	317	317	317	317	317
Number of Countries	16	16	16	16	16	27
First Diff.	Yes	Yes	Yes	Yes	Yes	Yes
Aid lagged	Yes	Yes	Yes	Yes	Yes	Yes

Notes: Table 2 presents the main results. Aid is the net official development assistance and aid. Political orientation is a dummy variable of 1 if the government in power is leftist or 0 otherwise. Aid*Pol.Orientation is an interaction term for Aid and Political orientation. Political stability is a measure of the absence of violence and political instability. Corruption is the measure of perceived corruption from Transparency International. Trade Openness is measure as a sum of import and export. Gross capital is gross capital formation as a percentage of GDP. Inflation is the annualized consumer price index. Foreign investment is foreign direct investment inflow to the country. t-statistics in parenthesis. *, ** and *** represent 10%, 5% and 1% significant level respectively.

Table 3. Sensitivity and robustness check regression results.

Variables	16 countries sample (alternative measure of dependent variables)		7 countries sample (sensitivity analysis.)
	(1)	(2)	(3)	(4)
	HDI	GCI	SI	CI
Aid	0.012** (2.080)	0.018** (2.134)	0.024** (2.29)	0.021** (2.36)
Aid*Pol.orientation	0.067*** (5.371)	−0.041*** (−3.019)	0.157** (2.016)	−0.081*** (2.039)
Political orientation	0.042** (2.328)	−0.034** (−1.97)	0.031* (2.108)	−0.014** (−1.99)
Political stability	0.014 (0.916)	0.004 (0.806)	0.011 (1.103)	0.008 (0.704)
Corruption	−0.314*** (−5.023)	−0.335** (−2.216)	−0.121** (−2.003)	−0.135** (−1.97)
Trade Openness	0.029 (1.021)	0.031*** (0.624)	0.017 (0.413)	0.022*** (7.015)
Gross capital	0.049 (1.027)	0.098** (1.98)	0.032* (1.73)	0.042** (2.128)
Inflation	−0.019** (−2.114)	−0.193 (−0.513)	−0.015** (−2.021)	−0.131 (−0.703)
Foreign investment	0.012 (0.015)	0.058** (2.437)	−0.005* (1.68)	0.038** (2.173)
Intercept	0.162*** (9.091)	0.192*** (7.036)	0.291*** (13.285)	0.152*** (11.21)
Net effect	0.086	−0.061	0.133	−0.067
Adjusted R^2	0.295	0.275	0.321	0.365
Observations	291	291	137	137
Number of Countries	16	16	7	7
First Diff.	Yes	Yes	Yes	Yes
Aid lagged	Yes	Yes	Yes	Yes

Notes. Table 3 presents the results of the robustness and sensitivity analysis. Years for HDI and GCI starts from 2004–2017 due to the availability of data. Aid is the net official development assistance and aid. Political orientation is a dummy variable of 1 if the government in power is leftist or 0 otherwise. Aid*Pol.Orientation is an interaction term for Aid and Political orientation. Political stability is a measure of the absence of violence and political instability. Corruption is the measure of perceived corruption from Transparency International. Trade Openness is measure as a sum of import and export. Gross capital is gross capital formation as a percentage of GDP. Inflation is the annualized consumer price index. Foreign investment is foreign direct investment inflow to the country. t-statistics in parenthesis. *, ** and *** represent 10%, 5% and 1% significant level respectively.