Macroeconomic Effects of Foreign Aids on Poverty Level in Nigeria
DOI:
https://doi.org/10.26437/ajar.03.02.2017.01Keywords:
poverty, foreign aids, Nigeria, ARDL/bound testAbstract
This study examines the effect of foreign aids on poverty level in Nigeria using Autoregressive Distributed Lag (ARDL) approach. Data spanned from 1980-2015 were sourced from World Bank development indicators, Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics. From the ARDL Bound test approach to co-integration, the result of the study showed that foreign aids help in reducing poverty, but does not have a significant effect on the level of poverty in Nigeria. The study therefore argued that foreign aids could be effective in Nigeria if multilateral and multidimensional aids system were adopted which should be directed to different areas in the Nigerian economy. Also, proper care and monitoring needs to be put in place in order to checkmate any attempt for corruption especially in a situation where private individuals would divert foreign aids to solve private needs.
References
Abiola, A. G. and Olofin, O. P. (2008). Foreign Aid, Food Security and Poverty Reduction in Nigeria: Examination of Possible Nexus. MPRA Paper. 16263, 1-23. University Library of Munich, Germany.
Alesina, A. and Dollar, D. (2000). Who Gives Foreign Aid to Whom and Why?
Journal of Economic Growth, 5, 33–63. March.
Burnside, C. and Dollar, D. (1998). Aid, the Incentive Regime, and Poverty
Reduction. Policy Research Working Paper. 1937 (Washington: World Bank)
Burnside, C. Dollar, D. (2000). Aid Policies and Growth. American Economic Review. 90, 847-868
Dalgaard, C. J, Hansen H., Tarp, F. (2004). On the Empirics of Foreign Aid and Growth. Economic Journal. 114, 191-216.
Durbarry, R. Gemmell, N. and Greenaway, D. (1998). New Evidence on the Impact of Foreign Aid and Economic Growth. Centre for Research in Economic Development and International Trade Research Paper No. 98/8.
Easterly, W. (1999). The Ghost of Financing Gap: Testing the Growth Model Used in the International Financial Institutions. Journal of Development Economics, 60, 423–38. December.
Easterly, W. Levine, R. and Roodman, D. (2004). Aid Policies and Growth: comment. American Economic Review. 94. 774-780.
Ekanayake, E. M. and Chatrna, D. (2008). The Effect of Foreign Aid on Economic Growth in Developing Countries. Journal of International Business and Cultural Studies. OC09003.
Guillaumont P, Chauvet, L. (2004). Aid and Performance: A Reassessment. Journal of Development Studies. 37, 66–92.
Gunning, J. W. (2001). Rethinking Aid. In Pleskovic B. and Stern N. (eds). Proceedings of the National World bank Conference on Development Economics, 2000, The World Bank: Washington D.C.
Hansen, H., and Tarp, F. (2001), Aid and Growth Regressions. Journal of Development Economics, 64, 547-570.
Hansen, H. and Tarp, F. (2000). Aid Effectiveness Disputed, in Foreign Aid and Development: Lessons Learnt and Directions for the Future, eds. by F. Tarp, and P. Hjertholm, London: Routledge, 103-128.
Hansen, H. and Tarp, F. (2000). Aid Effectiveness Disputed. Journal of International Development. 12, 375-398.
Hansen, H. Tarp, F. and Vikkelso, S. (1998). Aid Effectiveness: A Survey of 30 Years of Literature on Aid-Savings, Aid-Investment, and Aid-Growth Linkages. Development Economics Research Group.
Ijaiya, G. T. and Ijaiya, M. A. (2004). Foreign aid and Poverty Reduction in Sub-Saharan
African: A Cross Country Investigation. South African Journal of Economic and Management Sciences.7(3).
Kargbo, P.M. (2012). Impact of Foreign Aid on Economic Growth in Sierra Leone. Working Paper No. 2012/07. World Institute for Development Economics Research.
Kurihara, Y. (2014). Does foreign aid promote economic growth? Global Business and Economics Research Journal, 3(4), 20-30.
Lensink, R. and Howard, W. (2000). Aid Allocation, Poverty Reduction and the
Assessing Aid Report. Journal of International Development, 12, 399–412. April.
Lensink, R., and Howard, W. (2001). Are There Negative Returns to Aid? Journal of Development Studies, 37, 42-65.
Masud, N. and Yontcheva, B. (2005). Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid. IMF Working Paper, International Monetary Fund. May
Minoiu, C. and Reddy, S. G. (2007), Aid Matters. Revisiting the Relationship Between
Aid and Growth. Challenge. 50(2). March/April, ISSN 0577–5132, DOI: 10.2753/0577–51325002XX
Mishra, P. and Newhouse, D. (2007). Does health Aid matter? (Unpublished: Washington
D.C. International Monetary fund)
Moreira, S. B. (2002). Ajuda Públicaao Desenvolvimento e Crescimento Económico: Estudos Cross-Country da RelaçãoAjuda-Crescimento,†Masters Dissertation, Technical University of Lisbon.
Narayan, P.K. (2004). Reformulating critical values for the bounds f-statistics approach to cointegration: An application to the tourism demand model for Fiji. Discussion Papers, Department of Economics, Monash University, Australia. Retrieved on 20th,
June, 2015.www.arrow.monash.edu.au,monash:7176/DOC
Olofin,O. P. (2013). Foreign aids and poverty level in West African countries: New evidence using heterogeneous panel analysis. Australian Journal of Business and Managemen. 3(4). 9-18.
Pesaran, M.H., Shin, Y., & Smith R. (2001). Bounds testing approaches to the analysis of
level relationships, Journal of Applied Econometrics, 16, 289-326.
Pesaran, H.M., Shin, Y., & Smith, R. (1996) Testing the existence of a long-run relationship, DAE Working Paper Series No. 9622, Department of Applied Economics, University of Cambridge. Retrieved on 15th December, 2014 from https://ideas.repec.org
Pesaran, M. H. (1997). The Role of Economic Theory in Modeling the long-run. Economic Journal. 107, 178-191.
Pesaran, M. H, Shin Y, Smith R. J (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics. 16, 289-326.
Rajan, R. and Subramanian, A. (2005). What Undermines Aid’s Impact on Growth. NBER Working Paper. No. 11657.
Tsikata, T. M. (1998). Aid Effectiveness: A Survey of the Recent Empirical Literature.
IMF Paper on Policy Analysis and Assessment 98/1 (Washington: International Monetary Fund).
Woldekidan, H. (2015). The role of foreign aid in reducing poverty. Time series evidence from Ethiopia. Journal of nEconomics and International Finance. 7(3), 59-71. Doi:10.5897/JEIF2015.
Downloads
Published
How to Cite
Issue
Section
License
By submitting and publishing your articles in the African Journal of Applied Research, you agree to transfer the copyright of the Article from the authors to the Journal ( African Journal of Applied Research).
