Aid Flows Research Articles

Assessing economic effects of foreign aid and capital flows on real economic growth

The study sought to investigate the effect of foreign aid and capital flow on real economic growth for the SADC region. Eleven member states of the SADC region are selected for analysis based on data availability. In the study, foreign aid is represented by official development assistance (ODA), external debt (EXTD), and debt service cost (DSC) while the inflow of foreign direct investment represents capital flow (FDI). Annual percentage growth of per capita Gross Domestic Product (GDPpc) is used as a proxy of real economic growth. Trade balance (TRO) is included in the model regression as a control variable. The study employed panel econometric models. The results of panel ARDL indicate that ODA and FDI were found to have a negligible effect on real growth in the short run but contribute positively and significantly in the long run. This revelation supports the view that ODA and FDI are essential determinants of growth. On the other hand, EXTD together with its associated costs was found to have a detrimental effect both in the short run and long run. Based on the results of the study, the authors put forward the following policy recommendations for the SADC region: most importantly, there ought to be effective management of external debt by SADC countries to reduce their overdependency on external debt for their domestic needs. Given the positive effect of FDI in the region, the SADC region needs to intensify its efforts in devising measures that will attract foreign investors to the region which among others include pursuing inclusive and sustainable economic growth. Lastly, there is a need for effective management and official development aid to ensure sustainable growth.

Catastrophic impact of 1947 partition of India on people's health.

The partition of India on the dissolution of British Raj into two dominions is known to have been violent, polarizing and caused large-scale loss of life (about two million) and an unprecedented migration of 14 million people between the two dominions, India and Pakistan. It is not known how well the then scientific community covered this man-made disaster, and the response of the international community with aid. A systematic review was conducted using different electronic databases of PubMed, Econlit, United Nations resolutions, Government of India websites, and Google Scholar for the period January 1947 to December 1951 on the impact of the partition of the Indian sub-continent, and to identify the international response toward this humanitarian crisis. We could locate only twenty-four publications. Partition not only caused monumental humanitarian suffering, but also contributed to food deficits, adverse impact on trade and industries, national income and harmed public health. In contrast, no significant attention was expressed by the international scientific community or the United Nations, or aid provided during this catastrophic event. The review demonstrates the apathy by the contemporary international scientific research community on the social as well as economic damage caused by the partition of India. We suggest that the international scientific and research community should play the role of vigilante and fact finder to unearth the facets of mass human tragedy and its long-term consequences so that global consciousness is awakened, and help and aid flows when it is most needed.

How Is Institutional Quality Moderating the Effect of Terrorism on International Tourism, Trade, Foreign Aid Inflow and Economic Growth in Sub-Saharan Africa?

This study examines how international tourism, foreign aid inflow, international trade and economic growth are responding to terrorism in Sub-Saharan Africa (SSA), and how institutions are moderating these interactions. To answer these questions, we examined a panel of 40 SSA countries for the period 2010–2020 based on the system generalised method of moments framework. Our results revealed that: (a) terrorism impacts adversely on tourism, foreign aid inflow, trade and overall economic growth in SSA; and (b) institutional quality has not been effective in mitigating the adverse effects of terrorism on tourism, foreign aid inflow, trade and economic growth in SSA. Policy implications are discussed. JEL Codes: C33; F10; F35; F43; L83; N20

United Nations peacekeeping operations and multilateral foreign aid: Credibility of good governance

Does hosting UN Peacekeeping Operations (UN PKOs) increase multilateral foreign aid inflows into civil war-affected countries? Under what conditions do UN PKOs make multilateral foreign aid effective, enhancing governance quality? Multilateral foreign aid agencies increasingly focus on good governance as an allocation criterion. However, multilateral aid assistance faces dilemmas when allocating aid since it undermines the credibility of government commitments to good governance. This study argues that UN PKOs mitigate such uncertainty by initiating democratization, capacity-building, and political participation while mitigating political violence, thereby increasing the multilateral aid inflows. In missions involving these initiations, multilateral aid effectively enhances governance quality. These arguments are tested using a sample of countries that have experienced civil wars between 1991 and 2009. The findings suggest that UN PKOs increase the multilateral aid inflows. Moreover, increasing multilateral aid is more effective in improving the governance quality when missions have capacity-building or electoral tasks.

Можливості та ризики впровадження технології блокчейну як системи контролю фінансування та закупівель у Збройних Силах України

Background. In the context of war and increased inflow of international aid, Ukraine faces serious challenges in the field of defense procurement, where despite critical conditions, significant cases of corruption persist. This jeopardizes not only the efficiency of fund utilization but also the country's reputation in the eyes of all our partners on the international stage who provide us with direct financial assistance. The use of blockchain technology can be a key solution to ensure transparency, optimize fund flow, and reduce corruption by ensuring data immutability and information transparency. The aim of this article is to analyze in detail how the implementation of blockchain can optimize financial flows and procurement control in the Armed Forces of Ukraine, and to develop specific and effective recommendations for its efficient use and implementation in conditions of armed conflict. Methods. The study applied methods of analysis and synthesis to assess the impact of blockchain technologies on the transparency of defense procurement in Ukraine. A systematic approach was used to study existing procedures and potential improvements through the implementation of blockchain. Results. The research has found that blockchain can significantly increase transparency and reduce corruption risks in procurement processes within the Armed Forces of Ukraine. Detailed analysis has shown that blockchain integration ensures the immutability of records, open access to transactions, and a consensus mechanism that ensures all network participants agree on the validity of records before they are added to the blockchain. This can greatly impede illegal manipulations. Conclusions. Based on the obtained data, it is recommended to implement blockchain technologies in the sphere of defense procurement. This requires the development of specialized anti-corruption measures and detailed adaptation of existing legislation for full technological integration. This involves creating solutions that take into account the specifics of military processes and ensure the highest level of security, reliability, and transparency. Further research should focus on testing, optimizing, and developing detailed blockchain systems for their effective use and implementation in conditions of military conflict.

Актуальні проблеми стану та розвитку економічної системи України в умовах воєнного стану

A structural and system analysis of the state and development of the economic system of Ukraine in wartime conditions is carried out and a set of economic measures to counter the negative manifestations of the full-scale invasion of the territory of Ukraine by russia is proposed. The authors systematize the most significant and growing threats in the economic sphere under conditions of uncertainty: demographic crisis, deformed age structure of the population with a high proportion of elderly people; high number of migrants; extremely high dependence on external financial assistance; irregular flow of foreign aid and a decrease in its volume with a simultaneous increase in defense spending; structural imbalances in GDP. The authors note that forecasts for GDP growth will not lead to an increase in the quality of life of Ukrainians and their purchasing power. The authors emphasize that, given the unpredictability of the duration of hostilities, unpredictable financial and material losses, a colossal deficit of the State Budget of Ukraine, a decrease in the stability of the economic system, and further inflow of external financial assistance are the main sources of funding for the military and social spheres. The main directions of reconstruction of the economic system of Ukraine to achieve the highest possible level of economic and financial self-sufficiency of the national economy are proposed; increasing the level of resilience and development of domestic enterprises in the conditions of military conflicts; prioritizing military spending; return of migrants to their homeland; sustainable growth of labor productivity of specialists in all sectors of the economy. This is especially important for the agro-industrial complex – through the development of industrial parks, technology parks, innovation parks, ecological agroparks, clusters, etc. Also, in order to generate additional sustainable income for socially vulnerable segments of the population, it is important to develop social entrepreneurship and the «silver economy» in territorial communities.

Foreign Aid, Donors and Consultants- Analyzing Pakistan's Foreign Aid Inflows and Its Outcomes

Foreign Aid, Donors and Consultants- Analyzing Pakistan's Foreign Aid Inflows and Its Outcomes

The Effect of Foreign Aid on Health Outcomes in Nigeria: A Case Study of Lagos State Teaching Hospital

The paper examined the effect of foreign aid on health outcomes in the Lagos State Teaching Hospital in Nigeria. The purpose of the study was to uncover the actual effect of foreign aid inflows on health outcomes in Nigeria. The paper employed a quantitative research methodology which explored secondary resources from WHO publications, journals and thesis on foreign aids and their contribution to health outcomes in developing countries especially Nigeria, and other official reports, and statistical bulletins. Qualitative methodology was also applied in this research. A semi-structured questionnaire was administered within the Lagos State Teaching Hospital, with a sample population of 50 healthcare personnel. The qualitative methodology was adopted to give a holistic view of the research study based on the concepts of the literature review, and to fully understand the situation of the topic under study in the country. One of the situation which the paper found out, is that Nigeria have received substantial amount of foreign aid and yet these amount of foreign aid is still considered to be low given the huge healthcare issues in Nigeria. The paper also revealed that, the foreign aid received through the Government in the country have been largely ineffective in addressing the health issues of Nigeria. This could be as a result of the lack of balance between the health challenges in Nigeria and the rate at which these aids are used to fund it. Lack of appropriate policies on disbursement rate of foreign aids to various health cases such as tuberculosis, malaria, HIV/AIDS, and others, could be the case for the perception of how low foreign aids are to the issues of healthcare. This is, without the articulation of the corruption laced on handling of foreign aids in Nigeria. The paper finally revealed foreign aid has a positive impact on the Nigeria health outcomes especially in the area of maternal health, but grossly ineffective in other areas. The study recommended that, the Nigeria government should ensure that foreign aid meant for the health sector is not diverted to other sectors and that; foreign aid dedicated to the health sector should be used judiciously

Foreign Aid, Remittances and Poverty in Sub-Saharan Africa (2007-2018)

This study examined the impact of foreign aid and remittances on poverty in 37 sub-Saharan African countries from 2007 to 2018, a region that has received significant aid and remittances over the past 20 years. Key variables included Poverty Headcount (%), international remittances, and foreign aid flows. Data were obtained from the World Development Indicators, OECD, and the GCIP published by the United Nations. A dynamic panel data model was used, estimated with the system-Generalized Method of Moments (sys-GMM). The AR (2) and Hansen test statistics supported the model’s validity, and a robustness check with Real Household Final Consumption Expenditure confirmed the results. The findings indicate that remittances significantly reduce poverty in the short run but not in the long run, while foreign aid has an insignificant positive effect. The study recommends reducing remittance costs, removing barriers to inflow, and creating a policy environment that enhances the effectiveness of aid.

Contribution of Foreign Aid to the Economic Growth of Nepal

Foreign aid is an important factor for the rapid economic development, growth, and fulfillment of resource gaps in developing countries like Nepal. This paper analyzes the contribution of foreign aid and other foreign inflows of capital like foreign direct investment (FDI) and remittances to the GDP of Nepal. This paper examines the role of foreign aid on the economic growth of Nepal by using secondary time series data from 1996/97 to 2019/20. This paper also used the data series of the same period for trend analysis of foreign aid in Nepal. The secondary data obtained from the World Bank-World Development Indicator has been analyzed using ordinary least squares regression. This paper uses GDP as a dependent variable, foreign aid as a major independent variable, and FDI and remittances as supporting independent variables. The empirical results of this paper prove that there is a positive and significant relationship between GDP and foreign aid inflow to Nepal. The empirical results also prove that there is a positive and significant relationship between GDP and remittances. Similarly, there is also a positive and significant relationship between GDP and FDI.

Foreign Aids and Sustainable Development in Nigeria: An Application of Dynamic Least Squares Approach

The impact of foreign aid in donor and recipient countries is largely unsettled amongst existing studies, as well as, literature. This is attributed to the various arguments for and against the benefits of foreign aid, as it relates to sustainable development. As such, the study examined the effect of foreign aids on sustainable development in Nigeria from 1986-2021. The study used Augmented Dickey Fuller (ADF) unit root test, Johansen Co-integration test, Dynamic Least Squares (DOLS) and Granger Causality test. The ADF result showed that sustainable development, foreign aids, exchange rate, inflation rate and trade openness were stationary at first level difference. Also Johansen co-integration test confirmed a long-run relationship between the variables. The DOLS result revealed that, foreign aid, exchange rate and trade openness were significant with each exhibiting a direct link with sustainable development at 5%; while, that of foreign aid was at 10%. This suggests that inflow of foreign aids in different forms is essential for resource conservation. Also, inflation rate showed an inverse and significant link with sustainable development at 5%. In addition, a bi-directional causality was established between foreign aid and sustainable development. The study concluded that foreign aids in different forms, exchange rates stability and high exportation that comply with environmental sustainability boost Nigeria's sustainable development growth, but spiral inflation worsens it. Thus, it is advised that government should declare an emergency over environmental issues in order to guarantee an increase in the flow of foreign aid into environmental sustainability.

The fragmentation of the security-development nexus: the UK government’s approach to security and development 2015-2022

ABSTRACT The security-development nexus – the belief that security and development policy goals are closely connected and should be aligned – became a core feature of global peacebuilding policy in the 1990s. Over the last decade, however, the continued relevance of the nexus has been questioned. Drawing on analysis of key policy documents, ministerial speeches, aid flows, and key informant interviews, this article examines how the nexus has been articulated and practised in UK policy. We find that the security-development nexus has become less prominent and more fragmented. The ‘mechanistic’ approach to the nexus that existed until 2015, where broad causal links between poverty and (in)security were emphasised, has been replaced by a more diffuse and fractured approach. While this shift is an outcome of the unusually high degree of turbulence in UK politics since 2015, it also reflects international trends in security and development policy.

Foreign Aid’s Effect on Political Risks for Foreign Direct Investment: A Literature Review

The last decade has seen an increasing focus on the involvement of the private sector in international sustainable development, particularly in high-risk jurisdictions. This involvement encompasses a broad spectrum, incorporating innovative private sector instruments—now acknowledged as ODA-eligible by the OECD—as well as traditional tools of external official support to developing countries, which remain the primary contributors to ODA flows. This literature review aims to consolidate the academic exploration of the enduring classic foreign aid tools' impact on the political risks associated with foreign direct investment (FDI), and identifies prevalent limitations while suggesting approaches to overcome these challenges.The first section delineates the central theme and rationale behind the literature selection process, utilizing the Google Scholar database to contextualize the research within a comprehensive framework. The subsequent section categorizes and compares the most relevant studies based on formal criteria and methodological parameters. Sections three and four critically assess the scholarly contributions in conceptualizing the mitigating influence of foreign aid in general, focusing on its impact on specific political risks such as expropriation, terrorism, and corruption. The concluding section delves into studies that explore foreign aid and foreign direct investment flows from China, the largest non-Western donor.A bibliometric analysis reveals a noteworthy disparity between research attention and policymaking focus on the subject matter. Notably, the selected papers fail to comprehensively cover the full spectrum of primary extra-legal and legal-governmental political risks for transnational businesses. Scholars' assessments of foreign aid's mitigating effect often lack differentiation between grants and loans or between flows directed to different sectors, as well as the distinction between aid routed through public institutions and bypassing them. Notably absent is a comprehensive analysis encompassing the complete range of 'established' Western and emerging non-Western aid providers, or an exploration of aid flows from non-OECD countries other than China. Most research focuses on Africa and fails to differentiate between recipients based on fragility, income levels, or other relevant categorizations. Moreover, the researchers have yet to delve into data post the COVID-19 outbreak, a critical period that significantly altered perceptions of political risk, foreign aid, and FDI flows. The literature review illuminates a research gap awaiting substantial exploration.

Sector Specific Aid Flow, Official Development Assistance and Income Disparity: An Analysis from Selected Asian Countries

Over the decades, there has been much-observed income disparity in poor and developing countries. For this, donor countries provide aid for disbursement in some specific sectors to alleviate poverty and disparity. Considering the severe issue of income disparity in Asian economies, this research has focused on the role of sector-specific and foreign aid in lessening income disparity in these economies. We have used panel data from 10 selected Asian countries and found that aid for the education and health sectors. This research has utilized the data drawn from 10 selected Asian economies such as Bangladesh, India, Indonesia, Malaysia, Sri Lanka, Pakistan, Philippines, Iran, Jordan and China. The data has been considered from 2003 to 2018 due to data deficiency of important variables. The data has been taken from World Bank Development Indicators. The Gini coefficient income inequality) was considered a dependent variable. Education aid commitments (total number of commitments for education from donor countries), health aid commitments (total number of commitments for aid for the health sector from donor countries), official development assistance ($US million) and total population have been used as independent variables. The study used the fixed effect method to indicate an association of dependent and independent variables. Results of the study revealed that official development assistance has played a key role in lessening income disparity in these economies. Findings suggest its transparent allocation to both sectors for high growth, attracting more aid from the donor countries. There is a serious need for a stable political environment. Finally, measures should be taken to control the population in these countries.

External finance for climate change mitigation: Assessing the impact of energy aid and total aid inflows on the ecological footprint

This study examines the role of energy aid and total aid inflows in the ecological footprint of BRICS countries while controlling the economic growth, energy consumption, remittance inflows, and foreign direct investment inflows for the period spanning from 1992 to 2016. The empirical outcome of this work shows the long-run relationship for the selected variables. We find that overseas energy aid, total aid, and foreign direct investment inflows reduce ecological footprint while economic growth, remittance inflows, and energy consumption fuel it. These findings are robust across the alternative panel techniques used. However, the results imply that the energy aid, total aid, and investment capital coming from other countries and international agencies to BRICS countries are enhancing green energy plans rather than profiteering. This may be one of the reasons for the reduction of the ecological footprint in BRICS countries. Therefore, this study further suggests an effective climate mitigation policy for ensuring a life-sustaining green environment if the governments of BRICS countries can stimulate greater inflows of overseas energy aid, total aid, and foreign direct investment towards making the investment in green energy plans.

Do Women Benefit from Women Education Aid? Evidence from Panel Data

Generally, the literature on aid focuses on the potential growth effects of aggregate aid. Due to the fact that donors have consistently asserted the multidimensionality of their purposes, it is necessary to conduct a much more disaggregated analysis of aid effectiveness. In this study, the effect of women education aid on 72 developing countries is examined empirically over the period 1990–2016. Using cross-country regression, this study examines the effectiveness of aid targeted at women’s education. Based on the fact that donors provide a large amount of women’s education aid to countries whose voting positions in the UN General Assembly are similar, this analysis exploits an instrumental variable. This study shows that women’s education aid has a significantly positive effect on women’s education. The results of this study are robust when different sensitivity checks are performed. The findings have significant policy implications for donor countries and international aid organizations, as they assist in identifying the most effective types of foreign aid flow to the various sectors of the recipient country’s economy.

Heat and mass transfer analysis of assisting and opposing radiative flow conveying ternary hybrid nanofluid over an exponentially stretching surface

Access to dependable and environmentally friendly energy sources is critical to a country's economic growth and long-term development. As countries seek greener energy alternatives, the interaction of environmental elements, temperature, and sunlight becomes more critical in utilizing renewable energy sources such as wind and bioenergy. Solar power has received much attention due to extraordinary efficiency advances. under this context, the present work focus on solar radiation and chemical processes in the presence of modified ternary hybrid nanofluids (THNFs) circulating over an exponentially stretched surface in both aiding flow (A-F) and opposing flow (O-F) circumstances. The primary objective of this investigation is to dive into the complicated dynamics of these structures, which are distinguished by complex interactions involving radiation, chemical reactions, and the movement of fluids. We construct reduced ordinary differential equations from the governing equations using suitable similarity transformations, which allows for a more in-depth examination of the liquid's behavior. Numerical simulations using the Runge–Kutta Fehlberg (RKF) approach and shooting techniques are used to understand the underlying difficulties of these reduced equations. The results show that thermal radiation improves heat transmission substantially under O-F circumstances in contrast to A-F conditions. Furthermore, the reaction rate parameter has an exciting connection with concentration levels, with greater rates corresponding to lower concentrations. Furthermore, compared to the O-F scenario, the A-F scenario promotes higher heat transfer in the context of a modified nanofluid. Rising reaction rate and solid fraction volume enhanced mass transfer rate. The rate of thermal distribution in THNFs improves from 0.13 to 20.4% in A-F and 0.16 to 15.06% in O-F case when compared to HNFs. This study has real-world implications in several fields, including developing more efficient solar water heaters, solar thermal generating plants, and energy-saving air conditioners.

What about the Middle? Thinking Systematically about Localization

Colombia offers a unique case study for the localization debate. Unlike in other conflict‐affected countries, international nongovernmental organizations are not the main channel through which international aid flows. Instead, Colombia has strong state capacity and a historically well‐established civil society, including national‐ and regional‐level social organizations, think tanks, universities, and community‐based organizations throughout the country, all of which have extensive experience working for peace, security, and human rights. Particularly, the national‐level organizations, such as think tanks, human rights organizations, and peace organizations, are not “community‐based” because they do not represent a single community or population, but work at the national level, with deep connections to different communities and regions. Arguably, these “middle” organizations are considered local in the localization literature but with national‐level operational capacity. However, this type of organization does not seem to fit within the localization narrative, and the role of these organizations is largely hidden from the debate. More so, the very processes and mechanisms through which international aid is disbursed in Colombia detract from these national‐level organizations' ability to grow and meet their missions. This article aims to pull out how “middle” or national‐level organizations in Colombia face five key constraints to tailoring aid so that it is accessible to local communities and local organizations. It then presents a deep dive into how one national‐level organization engaged with an American philanthropy to create a transformed way of working in partnership and develop a new model for systemic collaboration and networks in Colombia. It ends with recommendations for how to continue to adapt the localization debate into meaningful action through partnerships throughout the Colombian and global ecosystems.

The impact of climate change on economic growth: Evidence from a panel of Asian countries

Asia is recognized as one of the most vulnerable regions. This research aims to identify climate change effects on economic growth. It proposes a new and comprehensive perspective to examine the climate-economy nexus in this region and provides an underpinning for assessing the pathway of the growing Asian economy under the SSP climate scenario (CMIP6). We apply a macroeconomic-climate modeling approach with a climate damage function. The damage function, which is based on the temperature anomaly, was examined under three classes of damage severity. The climate change effect has been examined by including the direct effect on the output as the level effect and two more channels, including capital depreciation and productivity growth reduction. The augmented Solow growth model framework that considers different types of capital, including physical, human, social, and environmental capital, was applied. The labor productivity or technology is assumed to depend on trade-related variables, including trade openness, financial development, and foreign aid inflows. Also, in order to test the constant returns to scale assumption, the CES production function, which is the flexible production technology, was used. The study relied on the country-year panel of GDP per capita and other macroeconomic variables such as labor force, capital formation, financial development index, trade openness, and foreign aid gleaned for 1994–2017 to estimate production functions using the GMM estimation method. The climate data on the annual mean temperature and projections of future temperature are based on ICMP6 by 2100 for Asian countries. Based on the CES estimation results, constant returns to scale or Cobb-Douglas production function was adopted. The estimation results show that physical and environmental capital account for the highest contribution to the output per worker. However, the contribution of trade-related variables was found to be insignificant. The projected pathway by 2100 establishes that climate change would significantly reduce Asian output per worker, especially if severe damage function is examined, and climate change stays on the SSP scenario-anticipated trajectory. The output elasticity with respect to temperature under the most severe scenario was obtained −22.80, corresponding to the output per worker reduction of 46.7 percent in 2100. Among the three channels of the climate effect, productivity growth reduction showed the most adverse effect on output. The lower flexibility of the production function that restricts the environmental replacement with other inputs, may lead to a more binding role under growing scarcity conditions. It was also found that labor and technology could contribute dampening the capital damage induced by higher temperatures. From the research results, the findings suggest measures aiming at providing flexible production technology, development of capital-embodied technologies, and lower dependence on environmental capital.

Foreign aid, debt interest repayments and Dutch disease effects in a real exchange rate model for African countries

The international competitiveness of developing countries is integral to their economic development; hence understanding the main determinants of the real exchange rate is important. The empirical literature supports the Dutch disease hypothesis that foreign aid inflows significantly contribute to a real appreciation of African currencies, but these studies do not account for the downward pressure on the exchange rate from foreign currency payments. Using a panel of sub-Saharan African countries from 1980 to 2017, we test the hypothesis that the real exchange rate appreciation from aid inflows is moderated by interest repayments on external debt. Our findings suggest that one-third of the Dutch disease effect of aid inflows on the real exchange rate is offset by external debt interest repayments. These findings are important in showing that countries with external debt servicing obligations can mitigate the Dutch disease effect of aid inflows on competitiveness.