@article{Ajibade:335166,
      recid = {335166},
      author = {Ajibade, Toyin B. and Animashaun, Jubril O.},
      title = {Rainfall Variability, Foreign Aid and Economic Growth in  Sub-Saharan Africa},
      journal = {International Journal of Agricultural Management and  Development (IJAMAD)},
      address = {2021-09-01},
      number = {1047-2023-1251},
      month = {Sep},
      year = {2021},
      abstract = {In this study, we address a broad question that relates  foreign development aid to economic growth in 41  Sub-Saharan African (SSA) countries employing panel data  spanning a twenty-five-year period. The panel data was  analysed using fixed effect Ordinary Least Square model. We  explored the within-country rainfall distribution to  identify the impact of foreign development aid per capita  (Value of Official Development Assistance)on GDP per  capita. Identifying aid with exogenous rainfall shocks will  plausibly address the endogeneity bias identified in  previous studies. In the first stage, we find that rainfall  shocks negatively correlate with amount of aid per capita  received suggesting that countries with negative economic  shock receive more foreign assistance than countries  without. However,in stage two, we find that aid per capita  has a statistically weak and negative impact on income per  capita in the region.We can identify several practical  reasons why aid may fail to translate to growth in this  region. For one, because aid is a form of unearned rents,  aid meant for public consumption could be privately  appropriated by political elites, distort capital  accumulation, and could undermine the broader economic  development when there is an income shock. While SSA  countries receiving aid may not grow faster than countries  without, aid might still play an economically useful role  at the micro-level. Specifically,aid could be beneficial if  local inputs at the micro-level are actively involved in  allocation of resources and deployed for the identification  of developmental needs.Aid could also be useful at  suppressing civil conflict associated with climate  vagaries.},
      url = {http://ageconsearch.umn.edu/record/335166},
      doi = {https://doi.org/10.22004/ag.econ.335166},
}