The investment volatility-dampening role of foreign aid in poor sub-Saharan African countries

References

• Abuzeid, F. 2009. “Foreign Aid and the ‘Big Push’ Theory: Lessons from Sub-Saharan Africa.” Stanford Journal of International Relations 11 (1): 16–23.
   Google Scholar
• Arndt, C., S. Jones, and F. Tarp. 2010. “Aid, Growth, and Development: Have We Come Full Circle?” Journal of Globalization and Development 1 (2): 1–29.
   Google Scholar
• Arndt, C., S. Jones, and F. Tarp. 2015. “Assessing Foreign Aid’s Long-Run Contribution to Growth and Development.” World Development 69: 6–18.
   Web of Science ®Google Scholar
• Bacha, E. L. 1990. “A Three-Gap Model of Foreign Transfers and the GDP Growth Rate in Developing Countries.” Journal of Development Economics 32 (2): 279–296.
   Web of Science ®Google Scholar
• Balcilar, M., D. Bathia, R. Demirer, and R. Gupta. 2021. “Credit Ratings and Predictability of Stock Return Dynamics of the BRICS and the PIIGS: Evidence from a Nonparametric Causality-in-Quantiles Approach.” The Quarterly Review of Economics and Finance 79: 290–302.
   Web of Science ®Google Scholar
• Balcilar, M., B. Tokar, and G. Olasehinde-Williams. 2020. “Examining the Interactive Growth Effect of Development Aid and Institutional Quality in Sub-Saharan Africa.” Journal of Development Effectiveness 12 (4): 361–376.
   Web of Science ®Google Scholar
• Bhattacharya, A., and M. Romani. 2013, March. Meeting the Infrastructure Challenge: The Case for a New Development Bank. In G-24 Technical Group Meeting, Washington, DC (Vol. 21).
   Google Scholar
• Boone, P. 1996. “Politics and the Effectiveness of Foreign Aid.” European Economic Review 40 (2): 289–329.
   Web of Science ®Google Scholar
• Breusch, T. S., and A. R. Pagan. 1980. “The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics.” The Review of Economic Studies 47 (1): 239–253.
   Web of Science ®Google Scholar
• Bulír, A., and J. Hamann. 2001. “How Volatile and Unpredictable Are Aid Flows, and What Are the Policy Implications?” IMF Working Paper no. 01/167. Washington, DC: International Monetary Fund
   Google Scholar
• Bulír, A., and A. J. Hamann. 2008. “Volatility of Development Aid: From the Frying Pan into the Fire?” World Development 36 (10): 2048–2066.
   Web of Science ®Google Scholar
• Burnside, C., and D. Dollar. 2000. “Aid, Policies, and Growth.” American Economic Review 90 (4): 847–868.
   Web of Science ®Google Scholar
• Burnside, C., and D. Dollar. 2004. “Aid, Policies, and Growth: Reply.” American Economic Review 94 (3): 781–784.
   Web of Science ®Google Scholar
• Chauvet, L., M. Ferry, P. Guillaumont, S. G. Jeanneney, S. J. A. Tapsoba, and L. Wagner. 2019. “Volatility Widens Inequality. Could Aid and Remittances Help?” Review of World Economics 155 (1): 71–104.
   Web of Science ®Google Scholar
• Chauvet, L., and P. Guillaumont. 2009. “Aid, Volatility, and Growth Again: When Aid Volatility Matters and When It Does Not.” Review of Development Economics 13 (3): 452–463.
   Web of Science ®Google Scholar
• Chenery, H. B., and A. M. Strout. 1966. “Foreign Assistance and Economic Development.” The American Economic Review 56 (4): 679–733.
   Web of Science ®Google Scholar
• Chervin, M., and S. Van Wijnbergen. 2010. “Economic Growth and the Volatility of Foreign Aid.” Tinbergen Institute Discussion Paper TI 2010-002/2, Tinbergen.
   Google Scholar
• Chudik, A., K. Mohaddes, M. H. Pesaran, and M. Raissi. 2016. “Long-Run Effects in Large Heterogeneous Panel Data Models with Cross-Sectionally Correlated Errors.” In Essays in Honor of Man Ullah, edited by G. González-Rivera, R. C. Hill, and T.-H. Lee, 85–135. Emerald Group Publishing Limited.
   Google Scholar
• Chudik, A., and M. H. Pesaran. 2015. “Common Correlated Effects Estimation of Heterogeneous Dynamic Panel Data Models with Weakly Exogenous Regressors.” Journal of Econometrics 188 (2): 393–420.
   Web of Science ®Google Scholar
• Djankov, S., J. G. Montalvo, and M. Reynal-Querol. 2008. “The Curse of Aid.” Journal of Economic Growth 13 (3): 169–194.
   Web of Science ®Google Scholar
• Domar, E. D. 1946. “Capital Expansion, Rate of Growth, and Employment.” Econometrica 14 (2): 137–147.
   Web of Science ®Google Scholar
• Doucouliagos, H., and M. Paldam. 2009. “The Aid Effectiveness Literature: The Sad Results of 40 Years of Research.” Journal of Economic Surveys 23 (3): 433–461.
   Web of Science ®Google Scholar
• Dreher, A., and S. Langlotz. 2020. “Aid and Growth: New Evidence Using an Excludable Instrument.” Canadian Journal of Economics/Revue canadienne d'économique 53 (3): 1162–1198.
   Web of Science ®Google Scholar
• Easterly, W. 1997. The Ghost of Financing Gap: How the Harrod-Domar Growth Model Still Haunts Development Economics (No. 1807). Washington, DC: World Bank Publications.
   Google Scholar
• Easterly, W. 2007. “Was Development Assistance a Mistake?” American Economic Review 97 (2): 328–332.
   Web of Science ®Google Scholar
• Ebeke, C., and H. Ehrhart. 2011. “Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies.” Journal of African Economies 21 (1): 1–27.
   Web of Science ®Google Scholar
• Ekanayake, E. M., and D. Chatrna. 2010. “The Effect of Foreign Aid on Economic Growth in Developing Countries.” Journal of International Business and Cultural Studies 3 (1): 1–13.
   Google Scholar
• Emirmahmutoglu, F., and N. Kose. 2011. “Testing for Granger Causality in Heterogeneous Mixed Panels.” Economic Modelling 28 (3): 870–876.
   Web of Science ®Google Scholar
• Fay, M., M. Toman, D. Benitez, and S. Csordas. 2011. “Infrastructure and Sustainable Development.” Postcrisis Growth and Development: A Development Agenda for the G 20 (22): 329–382.
   Google Scholar
• Fisher, R. A. 1932. Statistical Methods for Research Workers. Edinburgh: Oliver and Boyd.
   Google Scholar
• Gelb, A., and S. Grasmann. 2010. “How Should Oil Exporters Spend Their Rents?” Center for Global Development Working Paper, (221).
   Google Scholar
• Grigoli, F., and Z. Mills. 2011. Do High and Volatile Levels of Public Investment Suggest Misconduct? The Role of Institutional Quality (No. 5735). Washington, DC: The World Bank.
   Google Scholar
• Grigoli, F., and Z. Mills. 2014. “Institutions and Public Investment: An Empirical Analysis.” Economics of Governance 15 (2): 131–153.
   Web of Science ®Google Scholar
• Guillaumont, P., and M. Le Goff. 2010. “Aid and Remittances: Their Stabilizing Impact Compared. FERDI.” Working Papers on Development Policies 12: 35pp.
   Google Scholar
• Hansen, H., and F. Tarp. 2000. “Aid Effectiveness Disputed.” Journal of International Development 12 (3): 375–398.
   Google Scholar
• Intergovernmental Committee of Experts on Sustainable Development Financing. 2014. Report to the General Assembly. A/69/315. https://sustainabledevelopment.un.org/index.php?menu=1558.
   Google Scholar
• Lee, C. C., G. O. Olasehinde-Williams, and I. O. Olanipekun. 2020. “GDP Volatility Implication of Tourism Volatility in South Africa: A Time-Varying Approach.” Tourism Economics. Advance online publication. doi:https://doi.org/10.1177/1354816620970001.
   Google Scholar
• Lee, C. C., G. Olasehinde-Williams, and S. Saint Akadiri. 2021. “Are Geopolitical Threats Powerful Enough to Predict Global Oil Price Volatility?” Environmental Science and Pollution Research 28 (22): 28720–28731.
   PubMed Web of Science ®Google Scholar
• Lensink, R., and O. Morrissey. 2000. “Aid Instability as a Measure of Uncertainty and the Positive Impact of Aid on Growth.” Journal of Development Studies 36 (3): 31–49.
   Web of Science ®Google Scholar
• Levy, V. 1988. “Aid and Growth in Sub-Saharan Africa: The Recent Experience.” European Economic Review 32 (9): 1777–1795.
   Web of Science ®Google Scholar
• Mekasha, T. J., and F. Tarp. 2013. “Aid and Growth: What Meta-Analysis Reveals.” The Journal of Development Studies 49 (4): 564–583.
   Web of Science ®Google Scholar
• Morrissey, O. 2001. “Does Aid Increase Growth?” Progress in Development Studies 1 (1): 37–50.
   Google Scholar
• Mosley, P., J. Hudson, and S. Horrell. 1992. “Aid, the Public Sector and the Market in Less Developed Countries.” The Economic Journal 97: 616–641.
   Google Scholar
• Museru, M., F. Toerien, and S. Gossel. 2014. “The Impact of Aid and Public Investment Volatility on Economic Growth in Sub-Saharan Africa.” World Development 57: 138–147.
   Web of Science ®Google Scholar
• Olasehinde-Williams, G. 2021. “Is US Trade Policy Uncertainty Powerful Enough to Predict Global Output Volatility?” The Journal of International Trade & Economic Development 30 (1): 138–154.
   Web of Science ®Google Scholar
• Oya, C. 2006. The Political Economy of Development Aid as Main Source of Foreign Finance for Poor African Countries: Loss of Policy Space and Possible Alternatives from East Asia. London: School of Oriental and African Studies, University of London.
   Google Scholar
• Pallage, S., and M. A. Robe. 2001. “Foreign Aid and the Business Cycle.” Review of International Economics 9 (4): 641–672.
   Google Scholar
• Pesaran, M. H. 2021. “General Diagnostic Tests for Cross-Sectional Dependence in Panels.” Empirical Economics 60: 13–50.
   Web of Science ®Google Scholar
• Pesaran, M. H., A. Ullah, and T. Yamagata. 2008. “A Bias-Adjusted LM Test of Error Cross-Section Independence.” The Econometrics Journal 11 (1): 105–127.
   Web of Science ®Google Scholar
• Pesaran, M. H., and T. Yamagata. 2008. “Testing Slope Homogeneity in Large Panels.” Journal of Econometrics 142 (1): 50–93.
   Web of Science ®Google Scholar
• Rajan, R. G., and A. Subramanian. 2005. What Undermines Aid’s Impact on Growth? (No. w11657). Cambridge, MA: National Bureau of Economic Research.
   Google Scholar
• Seyoum, M., R. Wu, and J. Lin. 2014. “Foreign Direct Investment and Trade Openness in Sub-Saharan Economies: A Panel Data Granger Causality Analysis.” South African Journal of Economics 82 (3): 402–421.
   Web of Science ®Google Scholar
• Tarp, F. 2000. Foreign Aid and Development: Lessons Learnt and Directions for the Future. London: Routledge.
   Google Scholar
• UNCTAD. 2016a. Trade and Development Report 2016: Structural Transformation for Inclusive and Sustained Growth. New York and Geneva: United Nations publication.
   Google Scholar
• UNCTAD. 2016b. The Role of Development Banks in Promoting Growth and Sustainable Development in the South. New York and Geneva: United Nations publication.
   Google Scholar
• Vathis, O. 2013. “Aid Effectiveness: A Literature Review.” Jean Monnet Papers on Political Economy. https://jmonneteuldcs.files.wordpress.com/2013/11/jean-monnet-1-vathis.pdf.
   Google Scholar
• Whitaker, M. T. 2006. “The Impact of Foreign Aid on Economic Growth.” Bachelor of Arts in Economics Thesis Submitted to the Economics Faculty McAnulty College of Liberal Arts Duquesne University Pittsburgh, Pennsylvania.
   Google Scholar