Analysis of total factor production and official development assistance relationship in developing countries

Tony, Ezako Jean
A icle
Analysis o o al ac o p oduc ion and o icial
de elopmen assis ance ela ionship in de eloping
coun ies
Cogen Economics & Finance
P o ided in Coope a ion wi h:
Taylo & F ancis G oup
Sugges ed Ci a ion: Tony, Ezako Jean (2024) : Analysis o o al ac o p oduc ion and o icial
de elopmen assis ance ela ionship in de eloping coun ies, Cogen Economics & Finance, ISSN
2332-2039, Taylo & F ancis, Abingdon, Vol. 12, Iss. 1, pp. 1-17,
h ps://doi.o g/10.1080/23322039.2023.2294631
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/321390
S anda d-Nu zungsbedingungen:
Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen
Zwecken und zum P i a geb auch gespeiche und kopie we den.
Sie dü en die Dokumen e nich ü ö en liche ode komme zielle
Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich
machen, e eiben ode ande wei ig nu zen.
So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen
(insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en,
gel en abweichend on diesen Nu zungsbedingungen die in de do
genann en Lizenz gewäh en Nu zungs ech e.
Te ms o use:
Documen s in EconS o may be sa ed and copied o you pe sonal
and schola ly pu poses.
You a e no o copy documen s o public o comme cial pu poses, o
exhibi he documen s publicly, o make hem publicly a ailable on he
in e ne , o o dis ibu e o o he wise use he documen s in public.
I he documen s ha e been made a ailable unde an Open Con en
Licence (especially C ea i e Commons Licences), you may exe cise
u he usage igh s as speci ied in he indica ed licence.
h ps://c ea i ecommons.o g/licenses/by/4.0/
Cogen Economics & Finance
ISSN: 2332-2039 (Online) Jou nal homepage: www. and online.com/jou nals/oae 20
Analysis o o al ac o p oduc ion and official
de elopmen assis ance ela ionship in
de eloping coun ies
Ezako Jean Tony
To ci e his a icle: Ezako Jean Tony (2024) Analysis o o al ac o p oduc ion and official
de elopmen assis ance ela ionship in de eloping coun ies, Cogen Economics & Finance,
12:1, 2294631, DOI: 10.1080/23322039.2023.2294631
To link o his a icle: h ps://doi.o g/10.1080/23322039.2023.2294631
© 2024 The Au ho (s). Published by In o ma
UK Limi ed, ading as Taylo & F ancis
G oup.
Published online: 12 Jan 2024.
Submi you a icle o his jou nal
A icle iews: 928
View ela ed a icles
View C ossma k da a
Full Te ms & Condi ions o access and use can be ound a
h ps://www. and online.com/ac ion/jou nalIn o ma ion?jou nalCode=oae 20
DEVELOPMENT ECONOMICS | RESEARCH ARTICLE
Analysis o o al ac o p oduc ion and o icial de elopmen assis ance
ela ionship in de eloping coun ies
Ezako Jean Tony
Depa men o Economics and Managemen , Uni e si y o Bu undi, Bujumbu a, Bu undi
ABSTRACT
The objec i e o his pape was o analyze he ela ionship be ween o icial de elop-
men assis ance (ODA) and o al ac o p oduc ion (TFP) in de eloping coun ies o
allow a be e alloca ion o aid. We used a panel o 69 de eloping coun ies, 29 low-
income and 40 middle-income coun ies, om 2005 o 2019. Sys em GMM and ixed
e ec s we e used bo h wi h ime, and coun y ixed e ec s o ge id o unobse ed
he e ogenei y and possible aid endogenei y. Fo mo e p ecision, we disagg ega ed
aid by sec o o assess hei e ec on he main pa s o TFP. The esul s ound showed
no signi ican impac o ODA on TFP. Howe e , o low-income coun ies, aid in he
sec o o ag icul u e had a posi i e impac on human capi al, employmen , and eal
GDP. Aid in he sec o o indus y had a posi i e impac on human capi al, he sha e
o labo compensa ion, and he eal GDP. Fo middle-income coun ies, Aid in he
sec o o educa ion had a posi i e impac on employmen and capi al s ock. Aid in
he sec o o economic in as uc u e had a posi i e impac on human capi al,
employmen , and capi al s ock. We ecommend ha dono s di ec mos o he aid o
low-income coun ies in he ag opas o al sec o and in he sec o o indus y and min-
ing. In addi ion, we ecommend ha dono s di ec a signi ican pa o hei suppo
o middle-income coun ies in he sec o s o economic in as uc u e and educa ion.
Fu he mo e, e y good coo dina ion be ween dono s and ins i u ions in ecei ing
coun ies is a p io i y o adap assis ance o he policies o ecei ing coun ies.
ARTICLE HISTORY
Recei ed 24 Ap il 2023
Re ised 17 No embe 2023
Accep ed 5 Decembe 2023
KEYWORDS
ODA TFP ela ionship;
de eloping coun ies; ODA
by sec o ; aid e ec i eness;
o al ac o p oduc ion
REVIEWING EDITOR
Aye Goodness, Uni e si y o
Ag icul u e, Nige ia
SUBJECTS
Econome ics; De elopmen
Economics; Poli ical
Economy
JEL CLASSIFICATION
CODES
O4; C33; F35
1. In oduc ion
Despi e he nume ous economic c ises ha ha e shaken he wo ld, ODA (o icial de elopmen assis -
ance) has p o en o be he mos s able sou ce o ex e nal inancing o de eloping coun ies, especially
in compa ison wi h p i a e lows, which a e mo e sensi i e o economic shocks. Ne ODA, which is he
o al ODA spen minus he epaymen o loan p incipal by ecipien coun ies, has gene ally inc eased
s eadily in olume e ms since 1960, when ODA was i s measu ed and s ood a jus unde USD 40 bil-
lion (in 2020 p ices). I has mo e han doubled in eal e ms (þ118%) since 2000, when he Millennium
De elopmen Goals we e adop ed, despi e he impac o he 2008 c isis on supplie s’economies. In
o al, De elopmen Assis ance Commi ee (DAC) dono s ha e alloca ed USD 18.7 billion o COVID-19-
ela ed ac i i ies, which ep esen s 10.5% o hei combined ne ODA o 2021.
Fo many yea s, o icial de elopmen assis ance (ODA), which acco ding o he De elopmen
Assis ance Commi ee (DAC) o he OECD is de ined as aid p o ided by S a es o he exp ess pu pose
o p omo ing economic de elopmen and imp o ing li ing condi ions in de eloping coun ies, has been
one o he p e e ed means used by de eloped coun ies o help he leas de eloped coun ies o ini i-
a e he de elopmen p ocess. The la e equi es sus ained economic g ow h which is only possible
h ough an inc ease in ac o p oduc i i y. Howe e , e en i i was assumed o be exogenous, o al
CONTACT Ezako Jean Tony [email p o ec ed] Depa men o Economics and Managemen , Uni e si y o Bu undi, Gihosha,
Bujumbu a, Bu undi
ß2024 The Au ho (s). Published by In o ma UK Limi ed, ading as Taylo & F ancis G oup.
This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion License (h p://c ea i ecommons.o g/licenses/by/4.0/), which
pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed. The e ms on which his a icle has been
published allow he pos ing o he Accep ed Manusc ip in a eposi o y by he au ho (s) o wi h hei consen .
COGENT ECONOMICS & FINANCE
2024, VOL. 12, NO. 1, 2294631
h ps://doi.o g/10.1080/23322039.2023.2294631
ac o p oduc ion has been conside ed as one o he main ac o s ha de e mine he g ow h a e o
coun ies since Solow (1956) and Swan (1956) g ow h models. Mo eo e , endogenous g ow h models,
emphasizing ac o s such as educa ion, inno a ions, and quali y o ins i u ions o explain p oduc i i y,
show he cen al ole played by TFP in explaining economic g ow h in he long un and hus, de elop-
men (Aghion & Howi , 1996; G ossman & Helpman, 1991).
Howe e , despi e he con inuous inc ease o ODA, hei e ec s on p oduc i i y and hus, on economic
g ow h emain mi iga ed. In he li e a u e, some au ho s de end he posi i e impac o aid on g ow h
(A nd e al., 2015; G oß & Nowak-Lehmann Danzinge , 2022). In he same ein,

Swie czy
nska and Klibe
(2019) show ha aid in he o m o echnical coope a ion posi i ely a ec s p oduc i i y. The posi i e
e ec o aid on g ow h can be explained by he ac ha i p o ides supplemen a y esou ces o inance
and enhances in es men and capi al s ock in ecipien s’coun ies. In addi ion, as shown in Mahembe
and Odhiambo (2017), o eign aid a ec he de elopmen p ocess and hus, educes po e y h ough
he channels o economic g ow h, he unding o in as uc u e, educa ion, heal h, and o he de elop-
men ini ia i es. Fo o he au ho s, aid has a nega i e impac on g ow h (Doucouliagos & Paldam, 2013;
Nowak-Lehmann e al., 2012). Acco ding o G oß and Nowak-Lehmann Danzinge (2022), his nega i e
e ec o aid can be explained by i s opposi e impac on di e en channels o g ow h, namely in es -
men , sa ings, human capi al, and o al ac o p oduc i i y.
In addi ion, as sugges ed by Pa k and Pa k (2019), he dependence o A ican coun ies on aid p e-
en s hem om aking ad an age o o he oppo uni ies. This e lec s he p oblems ela ed o o eign
aid in de eloping coun ies because he ying o aid o condi ions se by dono coun ies may no se e
he in e es s o de eloping coun ies (Edo e al., 2023). Howe e , Phi i (2017) sugges s ha de elopmen
aid is no a p oblem i sel bu i ’s he misapp op ia ion ha limi s i s abili y o os e g ow h. The de el-
opmen p ocess equi es signi ican inancing needs o he es ablishmen o in as uc u e and public
se ices, hus, Bi d and Choi (2020) sugges ha i is impe a i e o con empla e he e ec i eness o
ex e nal sou ces o inance in engende ing economic g ow h.
Since he adop ion o he Sus ainable De elopmen Goals (SDGs) by Uni ed Na ions Membe S a es, i
has become undamen al o equi able p og ess o all ha o eign aid in ended o de eloping coun-
ies mus inc ease. In addi ion, achie ing he SDGs equi es sus ained economic g ow h which in
endogenous models in ol es, among o he hings, inc easing TFP ( o al ac o p oduc ion). The la e
desc ibes he pa o a coun y’s inc ease in p oduc ion ha canno be explained by inc eases in capi al
o labo . Jia and Williamson (2019) poin ou ha he e ec i eness o o eign aid in de eloping coun ies
is cons an ly ques ioned. Addi ionally, Bi d and Choi (2020) men ion ha i is impe a i e o conside he
e ec i eness o ex e nal inancing sou ces o gene a e economic g ow h. Gi en he impo ance o
achie ing he SDGs, he s udy o he ela ionship be ween TFPs and o icial de elopmen assis ance
becomes a p io i y, gi en he essen ial ole hey play in he de elopmen p ocess.
Fu he mo e, mos esea ch on he impac o o icial de elopmen assis ance on he economies o
de eloping coun ies has o en ocused on he impac o aid on GDP g ow h A nd e al. (2015). Fo
o he s, hey assess he impac o di e en ypes o ODA (g an s, loans, bila e al, mul ila e al) on eco-
nomic g ow h. To ou knowledge, he e is no pape ha speci ically e alua es he e ec o ODA om
o icial dono s on he o al ac o p oduc ion o de eloping coun ies. Thus, he objec i e o his pape
is o assess i ODA p omo es TFP in de eloping coun ies o allow a be e alloca ion o aid while educ-
ing i s possible nega i e e ec s. Fo mo e p ecision, his pape analyzes he di ec impac o ODA by
sec o on he main de e minan s o TFP. This will allow de eloping coun ies o op imize he con ibu-
ion o ODA in he de elopmen p ocess and in he achie emen o he SDGs. In addi ion, dono s will
he e o e be able o be e di ec hei suppo by aking in o accoun he ac o s ha d i e de elop-
men in de eloping coun ies.
The o iginali y o his wo k lies in: i s , he exclusi e use o o icial de elopmen assis ance p o ided
by o icial dono s as a p oxy o aid while o he s udies ocus mainly on bila e al o mul ila e al aid,
g an s, and loans. Thus, his pape is a con ibu ion o he exis ing li e a u e on he link be ween ODA
and p oduc i i y: second, he ac ha we di ided de eloping coun ies in he panel based on income
le el o a be e assessmen o he e ec aid on p oduc i i y based on he le el o de elopmen : hi d,
he use o aid by sec o and he main pa s o TFP o show he impac o aid in such sec o s on hose
pa s o p oduc i i y and hus allow a be e alloca ion o aid in sec o s ha induce mo e p oduc i i y:
2 E. JEAN TONY
ou h, he use o di e en econome ic models Sys em GMM and Fixed e ec wi h ime and coun y
ixed e ec o minimize he p oblem o endogenei y and es ima ion bias o p oduce mo e consis en
and eliable es ima ion esul s: i h, he assessmen o long- un coe icien s o be e guide policies. The
es o he pape is o ganized as ollows: sec ion 2 p esen s a b ie e iew o he heo e ical and empi -
ical li e a u e on he ela ionship be ween aid and p oduc i i y; sec ion 3 discusses he me hodological
amewo k o his esea ch; sec ion 4 p esen s he es ima ion esul s, while sec ion 5 concludes and sum-
ma izes he policy implica ions o he s udy.
2. Re iew o he li e a u e
The quali y and impac s o aid can be s udied h ough a wide a ie y o app oaches. Among o he s,
c oss-coun y eg essions can p o ide insigh in o he ela ionship be ween aid lows and coun y-le el
p og ess in a eas such as economic de elopmen , human de elopmen , and go e nance. The de elop-
men li e a u e has de o ed much a en ion o he link be ween aid and g ow h, as aid was supposed
o sol e he p oblems o he sa ings gap and po e y in low-income coun ies. Ne e heless, he ela-
ionship be ween de elopmen aid and p oduc i i y emains mixed. This p oduc i i y is ep esen ed by
o al ac o p oduc i i y which is he esidual o he g ow h eg ession equa ion (Kim & Loayza, 2019).
Theo e ically, se e al s udies ha e sugges ed ha gene ally, an inc ease in ODA has a posi i e e ec on
in es men and g ow h (A nd e al., 2015; Clemens e al., 2012; G oß & Nowak-Lehmann Danzinge , 2022).
Howe e , he magni ude o he impac depended on he coun y conside ed and i s ins i u ions quali y,
he le el o aid disbu sed, among o he ac o s. This is suppo ed by Al i e al. (2008) who showed ha aid
is posi i ely ela ed o economic g ow h, condi ional on sound economic policies, good go e nance, s ong
ins i u ion, and a o able na u al endowmen . In addi ion, o eign aid has a posi i e e ec on g ow h as i
helps o ill he o eign exchange gap and he sa ing-in es men gap o de eloping coun ies.
Fo o he au ho s, aid has a nega i e e ec on g ow h (Aska o & Doucouliagos, 2015;
Doucouliagos & Paldam, 2013; Nowak-Lehmann e al., 2012). One o he easons leading o aid ine -
ec i eness is he use o he la e o consump ion pu poses. As s a ed by Aska o and Doucouliagos
(2015) aid can lead ecipien coun ies o be less accoun able on domes ic accoun ing by no inancing
expendi u e h ough axa ion because he coun y is con en wi h he aid ecei ed. Mo eo e , Feeny
and De Sil a (2012) show ha aid can also be ine ec i e due o cons ain s ela ed o he abso p ion
capaci y o he ecei ing coun y. These cons ain s a e, among o he s, human and physical capi al
cons ain s, policy and ins i u ional cons ain s, mac oeconomic cons ain s, and social and cul u al
cons ain s, o add o his he cons ain s a e linked o he condi ions se by he dono coun ies o
bene i om his assis ance.
Empi ically, some s udies ha e ound a posi i e link be ween ODA and p oduc i i y. G oß and
Nowak-Lehmann Danzinge (2022) analyzed he impac o di e en o ms o aid (g an s, loans, bila -
e al and mul ila e al) on p oduc i i y using panel da a om 27 ecipien coun ies o e a 25-yea
pe iod (1985–2009). The au ho s used quan ile eg essions o de e mine whe he aid is less e ec i e
in coun ies wi h he lowes TFP quan iles. They ound di e ences be ween he impac o g an and
loan aid and he impac o bila e al and mul ila e al aid, wi h e idence ha aid educed TFP g ow h
in he0.1and0.25quan iles.Veide pass(2015) using a balanced panel o 89 low- and middle-
income coun ies om i e di e en geog aphical ca ego ies o e an 11-yea pe iod, analyzed he
e ec o o eign aid on p oduc i i y. He ound a weak signi ican co ela ion be ween o eign aid
and p oduc i i y. Kallon (2018) examined he long- un ela ionship be ween labo p oduc i i y and
o eign aid in Sie a Leone. He ound a posi i e and signi ican long- un aid-g ow h ela ionship. He
also inds ha o al ac o p oduc i i y (TFP) is he mos impo an ac o in explaining labo p od-
uc i i y in he coun y.
O he s udies ound a nega i e link be ween ODA and economic g ow h. Liew e al. (2012) examined
he impac o o eign aid on he economic g ow h o Eas A ican coun ies o e he pe iod o 1985 o
2010. The esul s sugges ed ha o eign aid has a signi ican nega i e in luence on economic g ow h o
hese coun ies. Mallik (2008) analyzed why A ican coun ies, namely he Cen al A ican Republic,
Malawi, Mali, Nige , Sie a Leone and Togo, didn’ b eak he po e y ap despi e ecei ing la ge in lows
o o eign aid. He ound ha he long- un e ec o aid on g ow h was nega i e o mos o hese
COGENT ECONOMICS & FINANCE 3

coun ies. Howe e , o he s udies ound a mixed o no signi ican ela ionship be ween ODA and
g ow h. Rahnama e al. (2017) analyzed he e ec o ODA on economic g ow h using GMM me hod-
ology. They ound a mixed e ec o aid on g ow h wi h posi i e e ec s on g ow h in high-income de el-
oping coun ies and nega i e e ec s on g ow h in low-income de eloping coun ies. Yiew and Lau
(2018) in es iga ed he ole and he impac o o eign aid (ODA) on economic g ow h (GDP) o 95
de eloping coun ies. The esul s indica ed ha ini ially, o eign aid nega i ely impac s he coun ies’
g ow h and o e a pe iod, i posi i ely con ibu es o economic g ow h.
Mo eo e , ODA e ec on p oduc i i y can be assessed h ough i s e ec on he main pa s o TFP; El
Nam ou y e al. (2022) shed ligh on he ole o o eign aid o seconda y educa ion on he de elopmen
o human capi al. The esul s showed ha o eign aid con ibu es signi ican ly o human capi al. Muelle
(2022) analyzed i Chinese o eign aid os e economic de elopmen and ound a la ge posi i e e ec o
aid on employmen . Mish a and Ai hal (2021) assessed he e ec o o eign aid on he de elopmen o
Nepal and ound ha he eal GDP and Aid a e highly associa ed.
The summa y o he li e a u e shows ha ODA has a posi i e impac on p oduc i i y and hus on
economic g ow h. Howe e , hese posi i e e ec s o aid can be annihila ed by he s uc u al sho com-
ings o he coun ies ecei ing aid, bu also by he condi ions unde which aid is g an ed by dono s.
This mixed e ec o aid on g ow h can be due o he ype o aid conside ed. While mos s udies used
agg ega e ODA he ew s udies ha ha e used disagg ega ed ODA ha e ocused on ODA in e ms o
bila e al o mul ila e al aid, g an s, and loans. This pape ills he gap in he li e a u e by using exclu-
si ely ODA om o icial dono s bu also by disagg ega ing ODA based on sec o s in which his aid is
alloca ed. Mo eo e , he panel has been di ided in o wo pa s based on income le el, low- and middle-
income coun ies. Ne e heless, Rajan and Sub amanian (2008) sugges ed ha he e is no e idence ha
o eign aid wo ks be e in he p esence o be e policy o geog aphical en i onmen s, o ha ce ain
o ms o aid wo k be e han o he s. This e lec s he ac ha he li e a u e on aid e ec i eness has
been plagued by a a ie y o empi ical impedimen s such as endogenei y, omi ed a iable bias o no
conside ing he dynamic aspec o aid. To add ess hese issues, we used sys em GMM and ixed e ec
models wi h coun y and ime ixed e ec . In addi ion, he ODA a iable has been lagged in all models.
3. Me hodology
One o he mos common p oblems o c oss-coun y s udies is he e ogenei y. Tha means ha each indi-
idual in he panel is di e en , and s uc u al ela ionship a ies ac oss indi iduals. To ge o e his he -
e ogenei y ha migh bias ou es ima ions, we op ed o a ixed e ec s model. This me hod allows o
elimina e bias om omi ed a iables ha a e cons an o e ime (coun y ixed e ec ) and a y o e
indi iduals and also o a iables ha a e cons an o e indi iduals and cons an o e ime ( ime ixed
e ec ). Usually, he economic impac o ODA in lows akes ime o become obse able. Thus, he aid
a iable will be included in he model as lag in o he o ake in o coun his dynamic.
TFP g ow hi ¼b0þb1ODAi, −1þqXi þciþd þei (1)
In Equa ion (1),TFP g ow hi is he g ow h o o al ac o p oduc ion, ODAi, −1is he lag o ne o icial
de elopmen assis ance, Xi is a ec o o explana o y a iables (go e nmen inal consump ion, heal h
expendi u e, emi ances, in as uc u e, and go e nance). b1,b0, and qa e pa ame e s. Indi iduals ixed
e ec s a e deno ed by ciand ime ixed e ec a e deno ed by d :
Thus, he endogenei y o aid is a key ac o o add ess. This endogenei y is due o he ac ha hey
migh be a bidi ec ional causali y be ween aid and o al ac o p oduc i i y. No only aid endogenei y,
bu o he explana o y a iables such as in as uc u e based on he li e a u e, seem o be a ec ed by
immedia e eedback om he dependen a iables ( o al ac o p oduc i i y). To ge id o ha , and o a
possible se ial co ela ion, we also used one s ep Sys em GMM o assess he obus ness o he esul s.
De eloped by Blundell and Bond (1998) Sys em GMM allows o ge id o ime cons an unobse ed
indi idual e ec s by i s di e encing wi h he e oskedas ici y obus s anda d e o s and yields esiduals
wi hou second o de se ial co ela ion. Fo his ma e o p e en ing se ial co ela ion and endogenei y,
we added in he Sys em GMM model ime ixed e ec o emo e c oss indi idual co ela ion and we
lagged he aid a iable in he model.
4 E. JEAN TONY
TFPg ow hi ¼b0þb1TFP g ow hi, −1þb2ODAi, −1þqXi þd þei (2)
In Equa ion (2),TFP g ow hi is he g ow h o o al ac o p oduc ion, TFP g ow hi, −1is he lag o o al
ac o p oduc ion, ODAi, −1is he lag o ne o icial de elopmen assis ance, Xi is a ec o o explana o y
a iables (go e nmen inal consump ion, heal h expendi u e, emi ances, in as uc u e, and go e n-
ance). b1,b0,b2, and qa e pa ame e s. Time ixed e ec s a e deno ed by d :
Be o e using he model s a ed abo e, we es ima ed he model wi h wo s age leas squa e by consid-
e ing aid as an endogenous a iable ins umen ed by he go e nance index. The esul s o he WU-
Hausman es o endogenei y showed ha a iables a e exogenous. I ’s no su p ising, in se e al pape s
go e nance is used as an ins umen o o ge id o aid endogenei y D ehe e al. (2019). Thus, adding
he go e nance index and lagging he aid a iable in he model helped in add essing his issue. This
esul ein o ces ou choice o use a ixed e ec model which assumes ha explana o y a iables a e
exogenous. Sys em GMM is conside ed as he main es ima o because i allows he use o ins umen s
e en i a iables a e exogenous and, in ha way, helps o con ol o unobse able endogenei y.
Fo mo e cla i y on he ela ionship be ween o al ac o p oduc ion and o icial de elopmen assis -
ance, we di ided he da ase in o wo pa s based on income le el wi h 29 low-income coun ies and
40 middle income coun ies. To go e en deepe in o his ela ionship, we di ided o icial aid in sec o
(Ag icul u e, o es y, and ishing; Economic in as uc u e and Se ices; Educa ion; Ene gy; Indus y, min-
ing, and cons uc ion) and o al ac o p oduc ion based on i s main pa s such as employmen ; human
capi al; sha e o labou compensa ion; eal GDP; Capi al s ock o assess he e ec o aid in hose sec o s
on di e en pa s o TFP. The a iables used o he pape a e desc ibed in Table 1.
We used da a om he Penn Wo ld Tables (PWT), OECD In e na ional De elopmen S a is ics, Wo ld
De elopmen Indica o s (WDI), and Wo ld Go e nance Indica o s (WGI) om 2005 o 2019 o 69 de el-
oping coun ies. The coun ies used in he panel a e shown in he able in Appendix A. The o al ac o
p oduc i i y measu e was aken om he PWT and was cons uc ed using he ollowing p ocedu e:
RTFPNA
j
RTFPNA
j −1
¼RGDPNA
j
RGDPNA
j −1
=Qj , −1
Whe e,
Qj , −1¼1
2LABSHj þLABSHj −1EMPj
EMPj −1
HCj
HCj −1

þ1þ1
2LABSHj þLABSHj −1
ðÞ

RKNA
j
RKNA
j −1
!
RTFP
NA
: TFP le el, compu ed wi h RGDP
NA
,RK
NA
,EMP,HC, and LABSH.
RGDP
NA
: Real GDP a cons an na ional p ices.
RK
NA
: Capi al s ock a cons an na ional p ices.
EMP: The numbe o people employed.
HC: Human capi al based on he a e age yea s o schooling om Ba o and Lee (2013) and an
assumed a e o p ima y, seconda y, and e ia y educa ion om Caselli (2005).
LABSH: The sha e o labo income o employees and sel -employed wo ke s in GDP.
j: coun y, and : yea .
Fo ou analysis, we calcula e annual TFP g ow h a es by di e encing he log- ans o med
TFP le els o yea and −1, ln( pna
)−ln( pna
−1
).
In Equa ion (1) in a_index and go _index a e indices o in as uc u e quali y and ins i u ional quali y,
espec i ely. These wo indices a e cons uc ed wi h he PCA (P incipal Componen Analysis) app oach.
Fu he mo e, he a iables used o he cons uc ion o hese wo indices a e eco ded in Tables 2 and 3
o he in as uc u e index and go e nance index, espec i ely.
4. P esen a ion o he esul s
Table 4 shows he di e ences be ween coun ies in e ms o g ow h o he TFP, despi e he ac ha all
hese coun ies a e conside ed as de eloping coun ies. The e is also a e y low a e age g ow h o he
TFP which is 0.7%. This is in line wi h he endogenous g ow h heo y which explains he di e ences
COGENT ECONOMICS & FINANCE 5
be ween coun ies by hei di e ences in p oduc i i y. Thus, one o he cha ac e is ics o de eloping
coun ies is a low TFP. In e ms o o al aid ecei ed, he minimum alue is posi i e. This shows he
egula i y and impo ance o he suppo gi en o de eloping coun ies by o icial dono s. Rega ding aid
by sec o , i is impo an o no e ha only aid ecei ed o he educa ion sec o has a posi i e minimum
alue, which es i ies o he egula i y o suppo in his sec o by dono s.
In addi ion, be o e es ima ing he model, we analyzed he co ela ion be ween he a iables used
and es ed hei s a iona i y. Table 5 epo s he co ela ion able. The esul s sugges a nega i e link
be ween o icial de elopmen assis ance and o al ac o p oduc ion. A posi i e link is ound be ween
aid in he sec o o ag icul u e and o al ac o p oduc ion. Howe e , i o icial de elopmen assis ance is
Table 1. Desc ip ion o a iables.
Name Va iable desc ip ion and sou ce
Heal h_exp Cu en heal h expendi u e pe capi a (cu en US$) [SH.XPD.CHEX.PC.CD]
Sou ce: WDI
lnODAsec _ag i_ Log o To al ODA ecei ed om o icial dono s in Ag icul u e, o es y and ishing
Sou ce: OECD
lnODAsec _ecoin a Log o To al ODA ecei ed om o icial dono s in Economic in as uc u e and Se ices
Sou ce: OECD
lnODAsec _edu Log o To al ODA ecei ed om o icial dono s in Educa ion
Sou ce: OECD
lnODAsec _ene Log o To al ODA ecei ed om o icial dono s in Ene gy
Sou ce: OECD
lnODAsec _indu Log o To al ODA ecei ed om o icial dono s in Indus y, mining and cons uc ion
Sou ce: OECD
lnODA_ne Log o To al ODA ecei ed om o icial dono s
Sou ce: OECD
TFP_g ow h To al ac o p oduc i i y known as he p oxy o p oduc i i y
Sou ce: PENN WORLD TABLES
Go _ incons Gene al go e nmen inal consump ion expendi u e (annual % g ow h) [NE.CON.GOVT.]
Sou ce: WDI
Remi ances Pe sonal emi ances, ecei ed (% o GDP) [BX.TRF.PWKR.DT.GD.ZS]
Sou ce: WDI
In a_index P oxy o in as uc u e quali y
Sou ce: au ho using WDI
Go _index P oxy o go e nance and ins i u ion quali y
Sou ce: au ho using WGI
Emp Numbe o pe son engaged (in millions)
Sou ce: PENN WORLD TABLES
Hc Human capi al index
Sou ce: PENN WORLD TABLES
Labsh Sha e o labou compensa ion in GDP a cu en na ional p ices
Sou ce: PENN WORLD TABLES
Realgdp Log o Real GDP a cons an 2017 na ional p ices (in mil. 2017US$)
Sou ce: PENN WORLD TABLES
Caps ock Log o Capi al s ock a cons an 2017 na ional p ices (in mil. 2017US$)
Sou ce: PENN WORLD TABLES
Table 2. Va iable used o he index o in as uc u e.
Name Desc ip ion o a iables and sou ces
Access_elec ici y_popula ion Access o elec ici y (% o popula ion) [EG.ELC.ACCS.ZS] sou ce: WDI
Ai _ anspo _passenge s Ai anspo , passenge s ca ied [IS.AIR.PSGR]
Sou ce: WDI
Indi iduals_using_in e ne Indi iduals using he In e ne (% o popula ion) [IT.NET.USER.ZS] sou ce: WDI
Table 3. Va iable used o he index o go e nance.
Name Desc ip ion o a iables and sou ces
Con ol_co up ion Con ol o Co up ion: Es ima e [CC.EST]
Sou ce: WGI
Go e nmen _e ec i eness Go e nmen E ec i eness: Es ima e [GE.EST]
Sou ce: WGI
Regula o y_quali y Regula o y Quali y: Es ima e [RQ.EST]
Sou ce: WGI
Voice_and_accoun abili y Voice and Accoun abili y: Es ima e [VA.EST]
Sou ce: WGI
6 E. JEAN TONY
di ided based on sec o o alloca ion i s impac on p oduc i i y depends on he pa o o al ac o p o-
duc ion conside ed. Table 6 displays he esul s o uni oo es ing. The esul s showed ha he null
hypo hesis o non-s a iona i y is ejec ed o all a iables in he i s di e ence. This inding sugges s
ha all a iables a e in eg a ed a i s o de I(1) o a le el I(0) and hus, we can p oceed wi h he
es ima ions.
Table 4. Desc ip i e s a is ics.
Va iable Obs Mean S d. De Min Max
TFP g ow h 658 .007 .035 −.119 .455
ODA_ne 1008 6.404 1.105 .963 10.001
Go _ incons 908 5.047 9.326 −32.84 90.75
Heal h_exp 1029 195.893 219.167 6.654 1531.484
In a_index 919 0 .98 −1.466 4.44
Go _index 1035 0 1.438 −4.42 3.541
Remi ances 1035 6.108 7.321 0 44.126
ODAsec _ag i_ 1034 2.771 1.575 −2.526 6.591
ODAsec _ecoin a 1034 3.8 1.934 −2.408 8.738
ODAsec _edu 1035 3.841 .976 .058 6.477
ODAsec _ene 1023 2.028 2.631 −4.605 7.381
ODAsec _indu 1033 1.092 1.68 −4.605 6.92
Emp 1035 22.191 58.699 .249 497.616
Realgdp 1035 11.691 1.552 8.202 16.031
Labsh 780 .481 .109 .212 .903
Caps ock 1035 12.868 1.686 9.38 17.383
Hc 945 2.218 .571 1.117 3.581
Table 5. Co ela ion ma ix.
Va iables (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) (17)
(1) lnODA_ne 1.000
(2) lnTFP_g ow h −0.044 1.000
(3) ln_go _ incons 0.117 0.179 1.000
(4) ln_heal h_expend −0.403 −0.178 −0.142 1.000
(5) ln_in a_index −0.117 −0.062 −0.146 0.530 1.000
(6) ln_go _index −0.112 −0.096 −0.052 0.505 0.388 1.000
(7) ln_ emi ances −0.015 0.193 −0.075 −0.239 −0.057 −0.193 1.000
(8) lnODAsec _ag i_ 0.465 0.030 0.098 −0.393 −0.128 −0.028 −0.039 1.000
(9) lnODAsec _edu 0.548 −0.135 0.084 −0.181 0.222 0.056 −0.218 0.426 1.000
(10) lnODAsec _ene 0.477 −0.011 0.025 −0.108 0.197 0.153 −0.075 0.329 0.490 1.000
(11) lnODAsec _indu 0.411 −0.021 0.051 −0.058 0.169 0.209 −0.120 0.433 0.485 0.422 1.000
(12) lnODAsec _ecoin a 0.543 −0.005 0.011 −0.192 0.205 0.219 0.003 0.416 0.500 0.763 0.510 1.000
(13) ln_emp 0.224 0.049 0.035 −0.076 0.414 0.134 −0.111 0.293 0.306 0.333 0.334 0.387 1.000
(14) Ln_hc −0.343 0.078 −0.163 0.445 0.505 0.201 0.378 −0.433 −0.282 −0.032 −0.045 −0.026 −0.070 1.000
(15) ln_labsh 0.086 0.027 0.033 0.117 0.011 0.308 0.154 0.152 −0.069 0.102 0.099 0.133 0.025 0.176 1.000
(16) ln_ gdp 0.154 −0.004 −0.018 0.158 0.670 0.206 −0.191 0.188 0.351 0.339 0.306 0.357 0.903 0.053 −0.051 1.000
(17) ln_caps ock 0.122 −0.006 −0.043 0.165 0.684 0.192 −0.193 0.148 0.361 0.338 0.278 0.329 0.856 0.094 −0.029 0.971 1.000
Table 6. Uni oo es (Augmen ed Dicky ulle ).
Va iables A le el Fi s di e ence O de o in eg a ion
lnODA_ne (0.011) (0.000) I(0)
lnTFP_g ow h (0.000) (0.000) I(0)
ln_go _ incons (0.005) (0.000) I(0)
ln_heal h_expend (0.006) (0.000) I(0)
ln_in a_index (0.687) (0.000) I(1)
ln_go _index (0.092)(0.000) I(0)
ln_ emi ances (0.211) (0.000) I(1)
lnODAsec _ag i_ (0.000) (0.000) I(0)
lnODAsec _edu (0.000) (0.000) I(0)
lnODAsec _ene (0.027) (0.000) I(0)
lnODAsec _indu (0.000) (0.000) I(0)
lnODAsec _ecoin a (0.000) (0.000) I(0)
ln_emp (0.453) (0.000) I(1)
Ln_hc (0.632) (0.026) I(1)
Ln_labsh (0.000) (0.000) I(0)
ln_ gdp (0.345) (0.000) I(1)
ln_caps ock (0.765) (0.000) I(1)
p-Value be ween(): (),()
,()
 signi ican a 10, 5, and 1%.
COGENT ECONOMICS & FINANCE 7
eal GDP. In addi ion, aid in economic in as uc u e and se ices has a posi i e impac on human cap-
i al, employmen , and capi al s ock. These esul s e lec how aid can imp o e o al ac o p oduc ion i
i ’s well alloca ed. Mo eo e , his pape p o ides new insigh in o de elopmen assis ance alloca ion o
imp o e p oduc i i y and he e o e o he ealiza ion o SDGs.
Ne e heless, W igh and Win e s (2010) conclude ha in e na ional poli ics a ec s o eign aid dis i-
bu ion as well as he eliabili y o aid condi ions. Mo eo e , Aboubaca e al. (2015) sugges ed ha he
e ec o aid on g ow h depends on he sec o in which i is dis ibu ed. Howe e , Rajan and
Sub amanian (2011) concluded ha o eign aid had an un a o able impac on a coun y’s compe i i e-
ness. In addi ion, he au ho s ound no e idence o aid e ec i eness conside ing be e policy o geo-
g aphical en i onmen s, o ha ce ain o ms o aid wo k be e han o he s. In he same ein, Quib ia
(2010) concluded ha he mixed esul s on aid e ec i eness can be aced o sha ed ailu es on he pa
o bo h he go e nmen and dono s.
5. Conclusion
The objec i e o his pape was o highligh he ela ionship be ween o al ac o p oduc ion (TFP) and
o icial de elopmen assis ance (ODA) o allow a be e alloca ion o aid while educing i s possible
nega i e e ec s. To do so, we used a panel o 69 de eloping coun ies ha we di ided in o 29 low-
income coun ies and 40 middle-income coun ies. We used wo models, ixed e ec and sys em GMM
wi h obus s anda d e o s o con ol o unobse ed he e ogenei y, omi ed a iable bias, and possible
aid endogenei y. Those wo models we e used wi h ime ixed e ec s and coun y ixed e ec s bu also
he aid a iable was lagged in all models. Fo mo e p ecision, we di ided ODA based on sec o and TFP
based on i s main pa s such as human capi al; employmen ; sha e o labou income; eal GDP; capi al
s ock o assess he e ec o aid on hem.
The indings showed ha o icial de elopmen assis ance had a nega i e and non-signi ican impac on
o al ac o p oduc ion. Howe e , conside ing he se o all coun ies, aid in he sec o o ag icul u e and
aid in he sec o o educa ion had a posi i e impac on employmen and capi al s ock while aid in educa-
ion had a nega i e impac on he sha e o labou compensa ion. Aid in he sec o o indus y (indus y,
mining, and cons uc ion) and aid in he sec o o economic in as uc u e (economic in as uc u e and
se ices) ha e a posi i e impac on human capi al and capi al s ock. Mo eo e , aid in he sec o o eco-
nomic in as uc u e ha e a posi i e impac on employmen . Gi en he posi i e impac o aid in di e en
sec o s, we ecommend ha dono s educe he condi ions ela ed o he g an ing o assis ance while
di ec ing aid acco ding o he ac o ela ed o p oduc i i y ha we wan o imp o e. P ope managemen
o his aid mus be he p io i y o he ins i u ions o he ecei ing coun ies. Fu he mo e, o mo e p ecision
in e ms o aid o ien a ion, we mus conside he le el o de elopmen o he coun y in ques ion.
Conside ing low-income coun ies, aid in he sec o o ag icul u e had a posi i e impac on human
capi al, employmen , and eal GDP. Aid in he sec o o indus y had a posi i e impac on human capi al,
he sha e o labo compensa ion, and on he eal GDP. Aid in hose sec o s (ag icul u e and indus y)
posi i ely a ec s h ee o he de e minan s o o al ac o p oduc ion. This emphasizes he impo ance
o assis ance in hese sec o s o op imize p oduc i i y. We ecommend ha dono s di ec mos o he
aid o low-income coun ies in hese sec o s which a e he basis o hese economies. Fu he mo e, policy
make s in hose coun ies mus ocus hei de elopmen plans a ound hese sec o s (ag opas o al, min-
ing) because hey a e o en be e equipped wi h ac o s.
Conside ing middle-income coun ies, aid in he sec o o ag icul u e had a posi i e impac on employ-
men . Aid in he sec o o educa ion had a posi i e impac on employmen and capi al s ock while ha ing a
nega i e impac on he sha e o labo compensa ion. Aid in he sec o o indus y had a posi i e impac on
capi al s ock while aid in he sec o o ene gy had a nega i e impac on he la e . Aid in he sec o o eco-
nomic in as uc u e had a posi i e impac on human capi al, employmen , and capi al s ock. As he esul s
show, aid in he sec o o economic in as uc u e and se ices a ec s h ee de e minan s o o al ac o
p oduc ion. Mo eo e , he in luence o aid in he indus ial sec o and ha o aid in he ag icul u al sec o
on p oduc i i y is educed. Addi ionally, he impac o aid in he educa ion sec o becomes e ec i e.
Thus, we ealize ha when coun ies a e a a highe s age o de elopmen , imp o ing he business
clima e ( h ough economic in as uc u e and se ices) and imp o ing he quali y o educa ion play a
14 E. JEAN TONY

cen al ole in inc easing p oduc i i y. We ecommend ha dono s di ec a signi ican pa o hei sup-
po o middle-income coun ies in he sec o s o economic in as uc u e and educa ion. Fu he mo e,
e y good coo dina ion be ween dono s and ins i u ions in ecei ing coun ies is a p io i y o adap
assis ance o he policies o ecei ing coun ies.
Ne e heless, his esea ch has some limi a ions ela ed o da a a ailabili y in de eloping coun ies
among o he hing, leading o he use o seconda y da a and sho s udy pe iod. In ega d o he pa a-
moun ole played by ODA o de eloping coun ies, we ecommend ha u u e s udies on he impac
o aid ocus on he e ec i eness o aid h ough he assessmen o he esul s o inanced p ojec s in he
sec o s s a ed abo e o op imize he posi i e e ec o aid on p oduc i i y.
Acknowledgmen s
B. E ole Pie e and B. Regine o hei emendous mo al suppo and encou agemen h oughou he esea ch p ocess.
Disclosu e s a emen
No po en ial con lic o in e es was epo ed by he au ho (s).
Abou he au ho
Ezako Jean Tony, Bu undian ci izen, holde o a bachelo ’s deg ee om he Facul y o Economics
and Managemen o he Uni e si y o BURUNDI. Mo eo e , I am passiona e abou economic
esea ch wi h he aim o con ibu ing o he de elopmen o my coun y, Bu undi, and de eloping
coun ies in gene al. Thus, his pape on ‘Analysis o O icial De elopmen Assis ance and To al
Fac o P oduc ion ela ionship in de eloping coun ies’is pa o a esea ch p ojec consis ing o ou
pape s ha I ini ia ed o ocus on he ole o inancial economics in he de elopmen p ocess. The
o he h ee pape s a e; analyze o in la ion and economic g ow h ela ionship in Bu undi: The
nexus be ween human de elopmen , ODA, ca bon emissions and go e nance in de eloping coun-
ies: analyze o globaliza ion and o al ac o p oduc ion in de eloping coun ies.
ORCID
Ezako Jean Tony h p://o cid.o g/0000-0002-0726-6210
Re e ences
Aboubaca , B., Xu, D., & Ousseini, A. M. (2015). Fo eign aid’s e ec on economic g ow h, new esul s om WAEMU’s
coun ies. Theo e ical Economics Le e s,5(3), 425–430. h ps://doi.o g/10.4236/ el.2015.53049
Aghion, P., & Howi , P. (1996). Resea ch and de elopmen in he g ow h p ocess. Jou nal o Economic G ow h,1(1),
49–73. h ps://doi.o g/10.1007/BF00163342
Ahle up, P. (2019). Fo eign aid and s uc u al ans o ma ion: Mic o-le el e idence om Uganda Uni e si y o
Go henbu g, Depa men o Economics.
Al i, E., Mukhe jee, D., & Shuk alla, E. K. (2008). Fo eign aid, g ow h, policy and e o m. Economics Bulle in,15(6), 1–9.
A nd , C., Jones, S., & Ta p, F. (2015). Assessing o eign aid’s long- un con ibu ion o g ow h and de elopmen .
Wo ld De elopmen ,69,6–18. h ps://doi.o g/10.1016/j.wo ldde .2013.12.016
Aska o , Z., & Doucouliagos, H. (2015). De elopmen aid and g ow h in ansi ion coun ies. Wo ld De elopmen ,66,
383–399. h ps://doi.o g/10.1016/j.wo ldde .2014.08.014
Ba o, R. J., & Lee, J. W. (2013). A new da a se o educa ional a ainmen in he wo ld, 1950–2010. Jou nal o
De elopmen Economics,104, 184–198. h ps://doi.o g/10.1016/j.jde eco.2012.10.001
Bi d, G., & Choi, Y. (2020). The e ec s o emi ances, o eign di ec in es men , and o eign aid on economic g ow h:
An empi ical analysis. Re iew o De elopmen Economics,24(1), 1–30. h ps://doi.o g/10.1111/ ode.12630
Blundell, R., & Bond, S. (1998). Ini ial condi ions and momen es ic ions in dynamic panel da a models. Jou nal o
Econome ics,87(1), 115–143. h ps://doi.o g/10.1016/S0304-4076(98)00009-8
Caselli, F. (2005). Accoun ing o c oss-coun y income di e ences. Handbook o Economic G ow h,1, 679–741.
Clemens, M. A., Radele , S., Bha nani, R. R., & Bazzi, S. (2012). Coun ing chickens when hey ha ch: Timing and he e ec s
o aid on g ow h. The Economic Jou nal,122(561), 590–617. h ps://doi.o g/10.1111/j.1468-0297.2011.02482.x
Doucouliagos, H., & Paldam, M. (2009). The aid e ec i eness li e a u e: The sad esul s o 40 yea s o esea ch.
Jou nal o Economic Su eys,23(3), 433–461. h ps://doi.o g/10.1111/j.1467-6419.2008.00568.x
COGENT ECONOMICS & FINANCE 15
Doucouliagos, H., & Paldam, M. (2013). The obus esul in me a-analysis o aid e ec i eness: A esponse o
Mekasha and Ta p. The Jou nal o De elopmen S udies,49(4), 584–587. h ps://doi.o g/10.1080/00220388.2013.
764595
D ehe , A., Fuchs, A., & Langlo z, S. (2019). The e ec s o o eign aid on e ugee lows. Eu opean Economic Re iew,
112, 127–147. h ps://doi.o g/10.1016/j.eu oeco e .2018.12.001
Edo, S., Ma hew, O., & Ogun inola, I. (2023). Bila e al and mul ila e al aid pe spec i es o economic g ow h in sub-
Saha an A ica. A ican Jou nal o Economic and Managemen S udies,14(1), 1–17. h ps://doi.o g/10.1108/AJEMS-
02-2022-0047
El Nam ou y, K., Sa i, S. K., & El Sha ali, B. A. (2022). The ole o o eign aid o seconda y educa ion on human capi al
de elopmen in Pales ine. Jo dan Jou nal o Economic Sciences,9(1), 17–32. h ps://doi.o g/10.35516/jjes. 9i1.249
Feeny, S., & De Sil a, A. (2012). Measu ing abso p i e capaci y cons ain s o o eign aid. Economic Modelling,29(3),
725–733. h ps://doi.o g/10.1016/j.econmod.2012.01.013
G oß, E., & Nowak-Lehmann Danzinge , F. (2022). Wha e ec does de elopmen aid ha e on p oduc i i y in ecipi-
en coun ies? Re iew o De elopmen Economics,26(3), 1438–1465. h ps://doi.o g/10.1111/ ode.12889
G ossman, G. M., & Helpman, E. (1991). Quali y ladde s in he heo y o g ow h. The Re iew o Economic S udies,
58(1), 43–61. h ps://doi.o g/10.2307/2298044
Guillaumon , P., & Chau e , L. (2001). Aid and pe o mance: A eassessmen . Jou nal o De elopmen S udies,37(6),
66–92. h ps://doi.o g/10.1080/713601083
Hi ano, Y., & O subo, S. (2014). Aid is good o he poo . Policy Resea ch Wo king Pape no. 6998. The Wo ld Bank.
Jia, S., & Williamson, C. R. (2019). Aid, policies, and g ow h: why so much con usion? Con empo a y Economic Policy,
37(4), 577–599. h ps://doi.o g/10.1111/coep.12418
Kallon, K. M. (2018). The long- un ela ionship be ween o eign aid and labo p oduc i i y in Sie a Leone. The
Jou nal o De eloping A eas,52(2), 95–107. h ps://doi.o g/10.1353/jda.2018.0024
Kim, Y. E., & Loayza, N. (2019). P oduc i i y g ow h: Pa e ns and de e minan s ac oss he wo ld. Wo ld Bank Policy
Resea ch Wo king Pape (8852).
Liew, C.-Y., Masoud Rashid Mohamed, & Said Sei Mzee. (2012). The impac o o eign aid on economic g ow h o
Eas A ican coun ies. Jou nal o Economics and Sus ainable De elopmen , 3(12), 129–138.
Mahembe, E., & Odhiambo, N. M. (2017). On he link be ween o eign aid and po e y educ ion in de eloping coun-
ies. Re is a Galega De Econom
ıa,26(2), 113–128. h ps://doi.o g/10.15304/ ge.26.2.4456
Makhlou , F. (2019). Is p oduc i i y a ec ed by emi ances? The e idence om Mo occo. Jou nal o In e na ional
De elopmen ,31(2), 211–222. h ps://doi.o g/10.1002/jid.3398
Mallik, G. (2008). Fo eign aid and economic g ow h: A coin eg a ion analysis o he six poo es A ican coun ies.
Economic Analysis and Policy,38(2), 251–260. h ps://doi.o g/10.1016/S0313-5926(08)50020-8
Mbah, S., & Amassoma, D. (2014). The linkage be ween o eign aid and economic g ow h in Nige ia. In e na ional
Jou nal o Economic P ac ices and Theo ies,4(6), 1007–1017.
Mish a, A. K., & Ai hal, P. S. (2021). Fo eign aid con ibu ion o he de elopmen o Nepal. In e na ional Jou nal o
Managemen , Technology, and Social Sciences. Wo king Pape s halshs-00597656, HAL.
Mi a, A., & Sha ma, C. (2022). To al ac o p oduc i i y and echnical e iciency o Indian manu ac u ing: The ole o
in as uc u e and in o ma ion & communica ion echnology. (No. 201115). CERDI.
Mosley, P., Hudson, J., & Ho ell, S. (1990). Aid, he public sec o and he ma ke in less de eloped coun ies: A eply.
The Economic Jou nal,100(399), 224–225. h ps://doi.o g/10.2307/2233607
Muelle , J. (2022). China’s o eign aid: Poli ical de e minan s and economic e ec s. Wo king pape , www.jo ismuelle .
com/ iles/chinaaid_la es _d a .pd , 2022.
Nowak-Lehmann, F., D ehe , A., He ze , D., Klasen, S., & Ma 
ınez-Za zoso, I. (2012). Does o eign aid eally aise pe
capi a income? A ime se ies pe spec i e. Canadian Jou nal o Economics,45(1), 288–313. h ps://doi.o g/10.1111/
j.1540-5982.2011.01696.x
Nwani, S. E. (2021). Human capi al in e ac ion on o eign aid-g ow h nexus: E idence om Sou h Asia and sub-Saha an
A ica. In e na ional Jou nal o De elopmen Issues,20(2), 258–279. h ps://doi.o g/10.1108/IJDI-11-2020-0261
O ji, A., Ogbuabo , J. E., An hony-O ji, O. I., & Mbonu, C. O. (2019). Analysis o capi al o ma ion and o eign aid nexus
in Nige ia. In e na ional Jou nal o Eme ging Ma ke s,14(2), 266–280. h ps://doi.o g/10.1108/IJoEM-11-2017-0457
Pa k, J.-D., & Pa k, J.-D. (2019). Assessing he ole o o eign aid, dono s and ecipien s. In Re-in en ing A ica’s de el-
opmen : Linking A ica o he Ko ean de elopmen model (pp. 37–60). Sp inge .
Phi i, M. W. (2017). The impac o aid on he economic g ow h o de eloping coun ies (LDCs) in Sub-Saha an A ica.
Ge ysbu g Economic Re iew,10(1), 4.
Quib ia, M. G. (2010 Aid e ec i eness in Bangladesh: Is he glass hal ull o hal emp y. Semina o ganized by
Depa men o Economics, Uni e si y o Illinois-USA (245).
Rahnama, M., Fawaz, F., & Gi ings, K. (2017). The e ec s o o eign aid on economic g ow h in de eloping coun ies.
The Jou nal o De eloping A eas,51(3), 153–171. h ps://doi.o g/10.1353/jda.2017.0066
Rajan, R. G., & Sub amanian, A. (2008). Aid and g ow h: Wha does he c oss-coun y e idence eally show? Re iew
o Economics and S a is ics,90(4), 643–665. h ps://doi.o g/10.1162/ es .90.4.643
Rajan, R. G., & Sub amanian, A. (2011). Aid, Du ch disease, and manu ac u ing g ow h. Jou nal o De elopmen
Economics,94(1), 106–118. h ps://doi.o g/10.1016/j.jde eco.2009.12.004
16 E. JEAN TONY
Riz i, S. A. F. (2019). Heal h expendi u es, ins i u ional quali y and economic g ow h. Empi ical Economic Re iew,2(1),
63–82. h ps://doi.o g/10.29145/ee /21/020103
Solow, R. M. (1956). A con ibu ion o he heo y o economic g ow h. The Qua e ly Jou nal o Economics,70(1), 65–
94. h ps://doi.o g/10.2307/1884513
Su, T. D., & Nguyen, C. P. (2021). P oduc i e con ibu ion o public spending and human capi al in de eloping coun ies
e isi ed: The ole o ade openness. Fo eign T ade Re iew,57(1), 66–84. h ps://doi.o g/10.1177/00157325211045471
Swan, T. W. (1956). Economic g ow h and capi al accumula ion. Economic Reco d,32(2), 334–361. h ps://doi.o g/10.
1111/j.1475-4932.1956. b00434.x

Swie czy
nska, K., & Klibe , A. (2019). Can aid s imula e p oduc i i y in Sub-Saha an A ica? A dynamic panel
app oach. Business and Economic Ho izons,15, 158–186.
Tasinda, O. T., Ze, T., & Imanche, S. A. (2021). A panel da a analysis o he impac o Chinese Fo eign Di ec
In es men (FDI), emi ances and o eign aid on human capi al g ow h and b ain d ain in A ica. Jou nal o Da a
Analysis and In o ma ion P ocessing,9(3), 175–188. h ps://doi.o g/10.4236/jdaip.2021.93012
Veide pass, A. (2015). Fo eign aid and p oduc i i y. Jou nal o P oduc i i y Analysis,43(3), 249–258. h ps://doi.o g/10.
1007/s11123-015-0440-4
Wa ula, M., Odondo, A., & Obange, N. (2019). E ec o o eign mul ila e al aid and o eign bila e al aid on capi al o -
ma ion in Kenya. Jou nal o Economics, 7(3), 1–16.
W igh , J., & Win e s, M. (2010). The poli ics o e ec i e o eign aid. Annual Re iew o Poli ical Science,13(1), 61–80.
h ps://doi.o g/10.1146/annu e .polisci.032708.143524
Yiew, T.-H., & Lau, E. (2018). Does o eign aid con ibu e o o impeded economic g ow h. Jou nal o In e na ional
S udies,11(3), 21–30. h ps://doi.o g/10.14254/2071-8330.2018/11-3/2
Appendix A
Table A1. Coun y name.
Coun y name
1. Angola, 2. A gen ina, 3. Aze baijan, 4. Bangladesh, 5. Benin, 6. Bhu an, 7. Bosnia and He zego ina, 8. B azil, 9. Bu kina Faso, 10. Cambodia,
11. Came oon, 12. Colombia, 13. Congo, Dem. Rep., 14. Cos a Rica, 15. Co e d‘I oi e, 16. Dominican Republic, 17. Ecuado , 18. Egyp , A ab
Rep., 19. El Sal ado , 20. E hiopia, 21. Fiji, 22. Geo gia, 23. Ghana, 24. Gua emala, 25. Hai i, 26. Hondu as, 27. India, 28. Indonesia, 29. I an,
Islamic Rep., 30. I aq, 31. Jo dan, 32. Kazakhs an, 33. Kenya, 34. Ky gyz Republic, 35. Lebanon, 36. Madagasca , 37. Malawi, 38. Malaysia,
39. Mali, 40. Mau i ania, 41. Mexico, 42. Moldo a, 43. Mongolia, 44. Mo occo, 45. Mozambique, 46. Myanma , 47. Namibia, 48. Nepal, 49.
Nica agua, 50. Nige ia, 51. Pakis an, 52. Philippines, 53. Rwanda, 54. Senegal, 55. Se bia, 56. Sou h A ica, 57. S i Lanka, 58. Tajikis an, 59.
Tanzania, 60. Thailand, 61. Tunisia, 62. Tu kiye, 63. Uganda, 64. Uk aine, 65. Uzbekis an, 66. Vie nam, 67. Zambia, 68. Zimbabwe, 69.
Albania
Low-income coun ies
1. Angola, 2. Benin, 3. Bhu an, 4. Bu kina Faso, 5. Came oon, 6. Congo, Dem. Rep., 7. Co e d‘I oi e, 8. Dominican Republic, 9. El Sal ado ,
10. E hiopia, 11. Ghana, 12. Gua emala, 13. Hai i, 14. Jo dan, 15. Kenya, 16. Ky gyz Republic, 17. Madagasca , 18. Malawi, 19. Mali, 20.
Mau i ania, 21. Mongolia, 22. Mozambique, 23. Namibia, 24. Rwanda, 25. Senegal, 26. Tanzania, 27. Uganda, 28. Zambia, 29. Zimbabwe
Middle-income coun ies
1. Albania, 2. A gen ina, 3. Aze baijan, 4. Bangladesh, 5. Bosnia and He zego ina, 6. B azil, 7. Cambodia, 8. Colombia, 9. Cos a Rica, 10.
Ecuado , 11. Egyp , A ab Rep., 12. Fiji, 13. Geo gia, 14. Hondu as, 15. India, 16. Indonesia, 17. I an, Islamic Rep., 18. I aq, 19. Kazakhs an,
20. Lebanon, 21. Malaysia, 22. Mexico, 23. Moldo a, 24. Mo occo, 25. Myanma , 26. Nepal, 27. Nica agua, 28. Nige ia, 29. Pakis an, 30.
Philippines, 31. Se bia, 32. Sou h A ica, 33. S i Lanka, 34. Tajikis an, 35. Thailand, 36. Tunisia, 37. Tu kiye, 38. Uk aine, 39. Uzbekis an, 40.
Vie nam
COGENT ECONOMICS & FINANCE 17