Impact Of Official Development Assistance Research Articles

The impact of official development assistance on foreign direct investment: the case of Japanese firms in India

While there is no clear answer to the overall impact of Official Development Assistance (ODA) on Foreign Direct Investment (FDI), it has been pointed out that Japanese ODA promotes its FDI. However, the mechanism of ODA’s impact on FDI has not been fully examined at the micro level, as most previous studies have used macro-level data. Therefore, this study examines the impact of ODA on FDI at the micro level in India, where an increase in ODA and FDI from Japan have been observed in recent years. Interviews were conducted with three Japanese firms and five Japanese public organizations, while questionnaires were administered to 33 Japanese firms. The results reveal that ODA effectively promotes FDI, albeit to a lesser extent than other FDI determinants. Economic infrastructure development through ODA, the expectations of such development, and the reception of orders for ODA Loan projects, promote FDI. Furthermore, the role of public institutions, including providing information to firms and acting as intermediaries with the government, is more effective in promoting FDI than ODA. Based on these results, in light of the OLI theory, it is suggested that a possible mechanism is that Japanese ODA promotes FDI by enhancing the “Ownership Specific Advantages” of Japanese firms and the “Location Advantages” of recipient countries. The novelty of this study lies in its clarification of the mechanism through which ODA promotes FDI from a micro-perspective, as revealed by a questionnaire survey conducted among firms. The FDI-promoting effects of ODA for economic infrastructure and ODA Loan suggested in this study not only contributes to the academic community but also have important implications for ODA policymakers.

Supporting agriculture in developing countries: new insights on the impact of official development assistance using a climate perspective

Agriculture is a major source of food and income for poor and rural households living in developing countries; yet, agricultural systems are increasingly threatened by changing climate conditions that compromise their productivity and resilience. Over time, international aid has provided support to the agricultural systems of recipient countries, though the literature is not unanimous in confirming their effectiveness.To shed light on this issue, the purpose of this work is to assess the efficacy of these aid in increasing the agricultural productivity of recipient nations, employing original approaches.First, to adopt a climate change perspective, we conduct our analysis using a recent classification adopted by the Official Development Assistance—the Rio Markers—which distinguishes aid between adaptation and mitigation to climate change.Second, taking into account that the starting conditions of recipient countries can significantly impact aid effectiveness, we classify 115 developing countries into four subgroups according to their vulnerability and readiness to climate change, as evaluated by the ND-Gain indicators.We perform a two-stage instrumental variable approach within the context of panel models to investigate the potential growth-enhancing impact that different types of agricultural aid may exert on the agriculture Total Factor Productivity in recipient countries.Our findings show that aid to agriculture, especially adaptation aid, has a positive impact on agricultural productivity growth. We also observe that countries with a higher climate readiness benefit the most from aid, whereas countries highly vulnerable and heavily dependent on the agricultural sector are less able to leverage the aid received to the same extent.Overall, our analysis confirms the importance of international aid to the agricultural sector and suggests that accurate impact assessment analyses should also consider a climate perspective to distinguish adaptation from mitigation aid.

Situating the Impact of Official Development Assistance (ODA) on Human Capital Development in Nigeria

Human capital remains one the greatest assets of any nation and as such, successful economies have always focused on enhancing the quality of their human capital stock. Nigeria and developing economies are confronted with human capital development challenges caused by poor and insufficient capital needed to build human capacity. Developing nations till date scramble for International capital to augment their capital needs for various investments including in human capacity. Foreign capital comes in forms of loans, investments, remittances or official development assistance (ODA), which is also called foreign aid or grants. Developing countries have witnessed little or low economic improvements despite having capitalised on different the windows of foreign capital to support their economies. ODA has been debated internationally with questions of whether it leads to the enhancement of the wellbeing of the underdeveloped countries or whether is merely serves as tool for control and dominance by developed economies. This narrative has presented researchers with the task and the interest to conduct various works on the impact of the different forms of international capital including the official development assistance on human capital development (HCD). Various studies on the extant topic came up with either conflicting and or mixed findings. This study therefore aims at exploring further, the impact of official development assistance (ODA) on human capital development. This researcher used Project aid (PAID), Programmed Aid (PRAID), Technical Assistance (TA), Humanitarian Aid (HA) and Food Aid (FA) to proxy ODA. The specific objectives are to explore, determine, assess, examine and ascertain the effect of PAID, PRAID, TA, HA and FA on HCD. The study adopted ex-post facto research design and data were sourced data from the Central Bank of Nigeria Statistical Bulletin and Annual Reports and the World Bank Development Indicators. Sourced data were analyzed

Working Poverty and Quality of Employment: The Great Refugee Crisis in Middle Eastern Host Countries

This paper focuses on the distribution of the working poor by income level across countries and examines how indicators such as the level of unemployment, the labour force, and the number of self-employed, impact that distribution. In addition, it also examines the impact of official development assistance and the massive influx of refugees as a result of the Syrian conflict. Four income levels of the working poor are analysed using the panel data technique. The sample includes the 5 main host countries (Egypt, Iraq, Jordan, Lebanon, and Turkey) for the period from 1991 to 2021. Our results confirm that unemployment is not a significant predictor for developing countries, so we recommend indicators of job quality. Moreover, our results confirm a low impact of refugees on the labour market in host countries. Furthermore, the effect of self-employment on the income level of the working poor is positive but limited.

Differences in impact of official development assistance on foreign direct investment by aid types

This study examined the impact of Official Development Assistance (ODA) on Foreign Direct Investment (FDI) by aid type, which has been largely overlooked in previous studies. Using the Generalized Method of Moments with a gravity model, five major donor countries (France, Germany, Japan, the United Kingdom, and the United States) and 63 recipient country pairs from 1996 to 2020 were analyzed. Granger causality tests, impulse response analyses and variance decomposition analyses using a panel vector autoregressive model were conducted to identify causal relationships in the time series and to quantitatively capture the impact. The results suggest that ODA Loans from Germany, Japan, and the United Kingdom promote FDI. Their ODA Loans have a high proportion of economic infrastructure and productive-sector support. Hence, their ODA Loans may attract FDI to recipient countries by developing infrastructure in recipient countries such as transportation, telecommunications, energy, and finance. This study contributes to an academic community by highlighting the differences of aid type in attracting FDI and provides practical implications for policymakers and practitioners in the field of international development.

Quantitative Analysis of the Impact of Official Development Assistance of the United States and China on the Voting of Sub-Saharan Africa in the UN General Assembly

The subject of the study is the development assistance of the United States and China to Sub-Saharan states and its impact on the voting of recipient countries in the UN General Assembly.The object of the study is the relations of the United States and China with Sub-Saharan Africa. The author examines in detail such aspects of the topic as development assistance, as well as voting in the UN General Assembly. Particular attention is paid to the impact of development assistance from donor States represented by the United States and China on the voting in the UNGA of recipient states on key issues of interest to China and the United States. The main conclusions of this study are the following: the more African countries receive more aid from the United States, the more they tend to vote for the same opinion as the United States in the UN General Assembly. On the other hand, China's assistance did not have a significant impact on the similarity of foreign policy between China and the recipient African States. The novelty of the study lies in the regression analysis. In addition to the amount of aid to African countries in the United States and China, the work includes variables that may influence the UN General Assembly vote on African recipient States in the statistical model as control variables based on existing research.

The Impact of Official Development Assistance on the Economic Growth of the Solomon Islands

The Solomon Islands is a least developed country in the Pacific Ocean. As a low-income country, its economic development has been significantly relied on official development assistance (ODA). According to the economic growth theory, ODA is a vital contributor to the economic development of a low-income economy. Nonetheless, the existing literature shows inconclusive empirical findings. This paper fills the research gap by scrutinizing the effect of ODA on the economic growth of the Solomon Islands. The autoregressive distributed lag (ARDL) model is adopted using the annual data from 1980 to 2019. The empirical findings from the ARDL model indicate the positive impact of ODA on economic growth, but with a marginal effect. A one percent increase in ODA raises 0.07 percent of per capita GDP. The Toda-Yamamoto approach of Granger causality analysis is performed for the robustness check. The finding from the Toda-Yamamoto method suggests that there is no causal relationship running from ODA toward the economic growth of the Solomon Islands.

공적개발원조(ODA)와 해외직접투자(FDI)가 개도국 경제성장에 미치는 영향에 대한 실증연구

Purpose: Through a precise empirical analysis with consideration of endogeneity and omitted variable problems, this study examines the impact of official development assistance (ODA) and foreign direct investment (FDI) of South Korea and the world on economic growth in developing countries.
 Originality: This study contributes the literature on ODA and FDI both by solving the problems of endogeneity and omitted institutional variables to which previous regression models might be vulnerable and by analyzing ODA’s promotion effect on FDI which great importance has recently been put on.
 Methodology: This research uses a 3SLS methodology to solve endogeneity problem caused by simultaneity among ODA, FDI and economic growth. In addition, this research compares the results of simultaneous equation 3SLS regression with those of single equation system GMM regression.
 Result: ODA of both South Korea and the world has a positive and significant impact on growth. However, neither FDI’s impact of growth nor ODA’s promotion effect on FDI is significant in both Korean model and world model. Regarding institutions, corruption perception index affects economic growth positively and significantly in the both models but investment risk index has a positive and significant impact on growth only in Korean model.
 Conclusion and Implication: Through supplementing the limitations to which previous regression models might be vulnerable and comparing the regression results of South Korea with those of the world, this study provides useful information for establishment of national policies on Korean ODA and FDI.

The Impact of Official Development Assistance on Carbon Emissions in Developing Countries: Implications for Mongolia

Using comprehensive panel data covering 110 developing countries over four decades (1981–2020), this study asks the following questions: (1) Will carbon emissions naturally decrease as income levels in developing countries rise? and (2) How do financial resources reduce those emissions? The study finds that: 1) major carbon emissions are expected to decrease after countries reach a certain income threshold level, confirming the so-called Environmental Kuznets Hypothesis, with the turning point occurring between $26,884 and $38,674; and 2) both official development assistance (hereafter, ODA) disbursement in the energy sector and private investment are more effective in relatively lower income developing countries (a threshold of $6,343 and $7,806) where higher temperatures prevail. This means that, in colder and relatively higher-income (rapidly growing, per se) economies, ODA and private investment should serve as strategic complements to each other, facilitating multi-stakeholder partnerships, including public-private partnerships, to address environmental degradation. In this regard, this article discusses the case of Mongolia.

Does official development assistance alleviate the environmental pressures during the urbanization of recipient countries? Evidence from the sub-Saharan Africa countries

Although there are many studies on the urbanization-environment nexus, a few studies are related to the least developed countries. To fill the research gap, the long-term equilibrium of urbanization-environment nexus in 37 sub-Saharan African countries, and the impact of official development assistance on the urbanization-environment nexus in these countries are investigated in this work. To this end, urbanization is set as the explanatory variable, carbon dioxide emissions and ecological footprint are set as the explained variables, and official development assistance is set as the threshold variable. The results of the proposed nonlinear panel regression models show that effect coefficients of urbanization on carbon emissions and ecological footprint are both positive, which means urbanization increases the environmental pressure in these 37 countries. In addition, there are double threshold effects in official development assistance on urbanization-carbon emissions and urbanization-ecological footprint nexus. As assistance crosses the threshold in turn, the promotion effect of urbanization on carbon emissions first increases and then weakens, and the regression coefficient shows an inverted “U” shaped change trend. The contribution of urbanization to ecological footprint decreases with the increase of assistance, and the coefficients show a decreasing trend. This indicates that official development assistance reshapes the urbanization-environment nexus in these sub-Saharan African countries, indicating the official development assistance helps sub-Saharan countries to alleviate environmental pressure in the process of urbanization. Some policy implications are proposed. Recipient countries should make rational use of aid and create favorable conditions for the inflow of foreign capital through their own efforts, so as to improve the level of environmental pollution control. Countries should work together to correctly grasp the development opportunities brought by urbanization, and promote the process of urbanization while ensuring the quality of smart cities to reduce carbon emissions.

The impact of Eternal debt and development on economic growth in Iraq for (2018-2000):An Analytical Econometric Study

Iraq is one of the most global economies suffering from international financial burdens, most notably the accumulation of external debt for more than two decades; As a result of concluding international debt contracts with a group of countries who took it upon themselves to support Iraq during the war and throughout the sanctions imposed on the country. The World Bank, the International Monetary Fund and the Bank for International Settlements estimated the external debt owed by Iraq (120 ) billion dollars in (2004 ), This external debt constitutes significant burden on Iraq’s general budget. but after the Emergency Post-Conflict Assistance agreement with the International Monetary Fund, Iraq’s external debt was reduced from (120 ) billion dollars in 2004 to (72 ) billion dollars in 201 8. As a result, the purpose of this study is to demonstrate the impact of foreign debt and official development assistance on economic growth in Iraq. To accomplish this, the study used a (Econometric - analytical) approach, collecting secondary data from various sources for the period (201 8-2000 ). Finally, the study reached a number of conclusions; That, despite Iraq’s economic growth, the impact of external debt on GDP during the period (201 8-2000 ) was negative. Inflation has also had a negative influence on GDP. While the impact of official development assistance was positive on economic growth during the study period. Accordingly, it is necessary to work on returning the state’s foreign debt on the one hand and increasing development aid on the other hand, in order to reduce the proportion of external debt from the gross domestic product and increase international development investments to Iraq.

The positive impact of official development assistance (ODA) on renewable energy development: Evidence from 34 Sub-Saharan Africa Countries

Appropriate use of official development assistance (ODA) to promote the renewable energy development levels in developing countries requires a better understanding of the effects of ODA on the renewable energy development in developing countries. Given this purpose, the panel threshold regression model was established to explore the effects of ODA and the renewable energy development in 34 Sub-Saharan African (SSA) countries. This model takes carbon dioxide intensity and urbanization as threshold variables to analyze the impact of ODA on the renewable energy development from the perspective of technological progress (carbon dioxide intensity) and social structure change (urbanization). The results show a non-linear relationship between the ODA and the renewable energy development, indicating that the threshold effect does exist. When carbon dioxide intensity and urbanization are lower than the threshold values, the ODA would promote the renewable energy development. This mean that ODA contributes to the renewable energy development in the early stages of technical progress and social structural change. However, when the carbon dioxide intensity and urbanization exceed the threshold values, the effect of ODA on renewable energy development was negative. This indicates that the ODA does not always promote the renewable energy development. On the contrary, when technological progress and social structure change develop to a certain stage, the ODA would hinder the renewable energy development. In order to better use the ODA to promote the renewable energy, the factors of technological progress and social structure change should be considered more carefully.

Does official development assistance affect a donor\u2019s exports? South Korea\u2019s case

This paper studies the impact of official development assistance (ODA) provided by South Korea for its exports to recipient countries. The empirical analysis is based on data from 1996 to 2014 and covers 121 recipient countries. The paper uses a 3SLS estimation method that accounts for a two-way causal relationship between ODA and exports while the endogeneity and sample selection bias are accounted for. Using the gravity model, we confirm the positive effects of ODA when fixed unobserved effects are controlled. The model is further generalized by disaggregating ODA into its underlying types of aid. Our results show that technical cooperation and loans have positive and significant effects, but grants have a negative impact on South Korea’s exports to recipient countries. In addition, we also examine South Korea’s ODA allocations. Our findings suggest that there is a two-stage decision-making process in the provision of aid. In the first stage, the aid’s humanitarian purpose plays a key role in responding to countries’ needs even when there is lower bilateral trade with these countries. In the second stage, decisions regarding the size of ODA are considered and these present a mixed purpose for giving ODA to higher importer countries.

Do women’s rights organisations need ‘femocrats’? The negotiation of the Peruvian–Spanish agreement for development co-operation 2013–2016

ABSTRACT In 2005, the Organisation for Economic Co-operation and Development (OECD) approved the aid effectiveness principles for improving the impact of Official Development Assistance (ODA). Donor countries such as Spain understood this agenda as an opportunity to promote gender equality in their development co-operation policy. However, gender equality almost disappeared as a priority in most of the bilateral agreements after 2005. This puzzling outcome leads me to ask how the implementation of the Paris principles made gender equality less of a priority, and how the feminist movement can ensure that gender equality and women’s rights are at the centre of this agenda. To answer these questions, I examine the negotiation process of the Peruvian–Spanish Strategic Framework 2013–2016. This case shows how exclusionary informal mechanisms may leave women’s rights organisations out of negotiation processes. I argue that connections of feminist and women’s movements with ‘femocrats’ and gender critical actors inside state machineries are crucial to defend gender equality as a priority sector. This is particularly relevant in the post-COVID-19 scenario and the global goal of ‘building back better’ with a gender lens. Without the participation of gender justice advocates in aid negotiation processes, it becomes more difficult to prioritise gender equality in bilateral co-operation agreements and, consequently, to allocate funds for women’s rights organisations.

The impact of ODA in constructing road traffic infrastructure on Vietnam’s economic growth

The study examines the impact of official development assistance (ODA) in constructing road transport infrastructure on Vietnam’s economic growth. The authors select gross domestic product (GDP) to represent economic growth and test the influence of ODA in constructing road traffic infrastructure on Vietnam's GDP. Based on the references and analysis of previous studies, the authors propose an impact assessment model of ODA in constructing road transport infrastructure, Foreign direct investment (FDI), Domestic Investment (VDT) and Labor Force (Labor) to economic growth through GDP as a dependent variable. The regression results show that the ODA had a positive impact on GDP. Moreover, ODA plays an important role in constructing road transport infrastructure on Vietnam’s economic growth.

The impact of official development assistance on the economic growth and carbon dioxide mitigation for the recipient countries

The purpose of this study is to investigate the relationship between official development assistance (ODA) on CO2 emissions based on both direct and indirect frameworks, using the annual panel data of 30 recipient countries of Korea from 1993 to 2017. It employs a modified impact, population, affluence, and technology (IPAT) model and a simultaneous equation framework for the direct model and indirect model, respectively. The empirical results suggest that ODA has both a direct and an indirect mitigation impact in the recipient countries. Compared to the direct impact, a small indirect mitigation impact of ODA on CO2 emissions is derived. However, the estimation results of the environmental Kuznets curve (EKC) equation imply that economic growth has the potential of mitigating the environmental degradation when the economic development in recipient countries of Korea reaches a certain level. Therefore, the bilateral cooperation, through ODA and the supportive policy, should make an effort to promote economic development and mitigation of environmental degradation in developing countries.

Impact of Japanese Official Development Assistance on Economic Growth and Development in Sri Lanka

Debt burden over foreign loans and economic impact of foreign-funded development projects have been much discussed and debated issue in the recent past. The debate on debt burden is mostly centered on the sheer size of the debt owned by development partners, not specifically on the generosity and impact of Official Development Assistance (ODA) offered by different development partners. Addressing these gaps, this study analyses generosity of Japanese ODA and its impact on economic growth and development in Sri Lanka. This study employs both descriptive and regression analyses for data analysis. Japanese ODA to Sri Lanka has grown at an average annual rate of around 6 per cent (in current US$ terms). Sri Lanka has been one of the priority countries for Japanese ODA largely due to the cordial relationship the two countries has maintained over the last several decades. Reflecting the unique future of Japanese ODA, a greater majority of assistance has channeled into economic infrastructure development/improvements in the country. More importantly, Japanese ODA has contained higher grant element compared to ODA offered by other major development partners such as ADB, World Bank, and China. The regression analysis of the study clearly indicates that there is a strong positive relationship between Japanese ODA and economic growth and development in the country. The findings are consistent with the finding of previous research studies. These imply that social and economic infrastructures developed with assistance of Japanese ODA has contributed to economic growth and development in the country. This impact was further supported through the micro-level evidence found in ex-post impact evaluations and third party impact evaluations. Overall evidences clearly reflect that Japanese ODA has not contributed to current foreign debt burden faced by the country.

The Impact of Official Development Assistance on the Productivity of Agricultural Production in Ghana, Cameroon and Mali

African economies depend largely on agriculture. Most people in Africa spend most of their lives in rural areas. Agriculture is an important sector of African industry and economy, it employs more than half of the population and accounts more than half of the national income. Due to population increase the food security remains an issue. In accordance of the lack of domestic capacities of African countries to deal with the problem, it is particularly important to increase assistance from developed countries. African States are expected to demonstrate the ability to implement policies that will change with the funds received / while receiving funds. However, for various reasons, despite numerous aid packages, it/Africa remains backward. This article examines the impact of foreign aid on agricultural productivity and the impact of the quality of management on development aid flows. As examples, it was decided to take such countries as Ghana, Cameroon and Mali. The purpose of this article is to confirm the hypothesis that development assistance correlates positively with the productivity of agriculture. The second hypothesis suggests that development aid flows respond to the quality of public administration. As for the results, the impact between the variables was recorded, but the results were ambiguous.

The Impact of Official Development Assistance on the Productivity of Agricultural Production in Ghana, Cameroon and Mali

African economies depend largely on agriculture. Most people in Africa spend most of their lives in rural areas. Agriculture is an important sector of African industry and economy, it employs more than half of the population and accounts more than half of the national income. Due to population increase the food security remains an issue. In accordance of the lack of domestic capacities of African countries to deal with the problem, it is particularly important to increase assistance from developed countries. African States are expected to demonstrate the ability to implement policies that will change with the funds received / while receiving funds. However, for various reasons, despite numerous aid packages, it/Africa remains backward. This article examines the impact of foreign aid on agricultural productivity and the impact of the quality of management on development aid flows. As examples, it was decided to take such countries as Ghana, Cameroon and Mali. The purpose of this article is to confirm the hypothesis that development assistance correlates positively with the productivity of agriculture. The second hypothesis suggests that development aid flows respond to the quality of public administration. As for the results, the impact between the variables was recorded, but the results were ambiguous.

Impact of Official Development Assistance on the Growth of WAEMU Member Countries: Assessment Following the Recommendations of the 2002 Monterrey Conference

AbstractThis paper evaluates the impact of official development assistance on the growth of WAEMU countries using an econometric approach. This assessment heeds the recommendation of the 2002 Monterrey Conference that diversification of development support resources is needed. The results obtained indicate that the total net public assistance received has a positive and significant impact in the short and long term on the growth of WAEMU countries. By diversifying the development support resources of the zone, the minimum threshold of official development assistance needed to boost the growth of the countries of the zone is 13.5% of GDP per capita.