@workingpaper{Asongu2012bp,
title = {Development thresholds of foreign aid effectiveness in Africa},
author = {Simplice A Asongu},
editor = {African 2012 Governance and Development Institute WP/12/010},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Development-thresholds-of-foreign-aid-effectiveness-in-Africa.pdf},
year = {2012},
date = {2012-04-01},
abstract = {Purpose – This paper examines whether initial levels in GDP growth, GDP per capita growth
and inequality adjusted human development matter in the impact of aid on development. In
substance its object is to assess if threshold development conditions are necessary for the
effectiveness of foreign aid in Africa.
Design/methodology/approach – The panel quantile regression technique enables us to
investigate if the relationship between development dynamics and development assistance differs
throughout the distributions of development dynamics.
Findings – Three main findings are established. (1) With slight exceptions, the effectiveness of
aid in economic prosperity (at the macro level) increases in positive magnitude across the
distribution. This implies high-growth countries are more likely to benefit from development
assistance (in terms of general economic growth) than their low-growth counterparts. (2) The
positive nexus between aid and per capita economic growth displays nonlinear patterns across
distributions and specifications, with the correlations broadly higher in top quantiles than in
bottom quantiles after controlling for the unobserved heterogeneity. (3) The aid-human
development nexus is negative and almost similar in magnitude across distributions and
specifications.
Practical implications – As a policy implication, there is need to improve management of aid
funds destined for health and education projects in the sampled countries. Moreover, given the
magnitude of the nexuses, while blanket aid initiatives could be applied for policies targeting the
HDI (due to the absence of significant differences in the magnitude of estimated coefficients),
such are unlikely to succeed for aid targeting economic prosperity at macro and micro levels.
From the weight of the findings, given a policy of balancing the impact of aid, it could be
inferred that low-growth countries would need more aid than their high-growth counterparts
because of the less positive effects in the former countries.
Originality/value – This paper contributes to existing literature on the effectiveness of foreign
aid by focusing on the distribution of the dependent variables (development dynamics). It is
likely that high- and low-growth countries respond differently to development assistance.},
keywords = {Foreign Aid; Political Economy; Development; Africa},
pubstate = {published},
tppubtype = {workingpaper}
}

@workingpaper{Asongu2012bq,
title = {Institutional benchmarking of foreign aid effectiveness in Africa},
author = {Simplice A Asongu},
editor = {African 2012 Governance and Development Institute WP/12/028},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Institutional-benchmarking-of-foreign-aid-effectiveness-in-Africa.pdf},
year = {2012},
date = {2012-04-01},
abstract = {This paper integrates two main strands of the aid-development nexus in assessing whether
institutional thresholds matter in the effectiveness of foreign aid on institutional development in
53 African countries over the period 1996-2010. Eight government quality indicators are
employed: rule of law, regulation quality, government effectiveness, corruption, voice &
accountability, control of corruption, political stability and democracy. Three hypotheses are
tested and the following findings are established: (1) Institutional benefits of foreign-aid are
contingent on existing institutional levels in Africa. (2) But for a thin exception (democracy),
foreign-aid is more negatively correlated with countries of higher institutional quality than with
those of lower quality. (3) The institutional benefits of foreign-aid are not questionable until
greater domestic institutional development has taken place. The reverse is true instead.
Government quality benefits of development assistance are questionable in African countries
irrespective of prevailing institutional quality levels.},
keywords = {Foreign Aid; Political Economy; Development; Africa},
pubstate = {published},
tppubtype = {workingpaper}
}

@workingpaper{Asongu2012bv,
title = {The political economy of development assistance: peril to government quality dynamics in Africa},
author = {Simplice A Asongu},
editor = {African 2012 Governance and Development Institute WP/12/008},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/The-political-economy-of-development-assistance.-Peril-to-government-quality-dynamics-in-Africa.pdf},
year = {2012},
date = {2012-02-01},
abstract = {This paper assesses the effectiveness of foreign aid in improving government institutions
in 52 African countries using updated data (1996-2010). Findings suggest development
assistance deteriorates government quality dynamics of corruption-control, political-stability,
rule of law, regulation quality, voice and accountability and government effectiveness. It is
therefore a momentous epoque to solve the second tragedy of foreign aid; high time economists
and policy makers start rethinking the models and theories on which foreign aid is based. In the
meantime, it is up to people who really care about the poor to hold aid agencies accountable for
results.},
keywords = {Foreign Aid; Political Economy; Development; Africa},
pubstate = {published},
tppubtype = {workingpaper}
}

@workingpaper{Asongu2012b_26,
title = {On the effect of foreign aid on corruption},
author = {Simplice A Asongu},
editor = {African 2012 Governance and Development Institute WP/12/031},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/The-effect-of-foreign-aid-on-corruption.pdf},
year = {2012},
date = {2012-02-01},
abstract = {The Okada & Samreth(2012, EL) finding that aid deters corruption could have an
important influence on policy and academic debates. This paper partially negates their
criticism of the mainstream approach to the aid-development nexus. Using updated
data(1996-2010) from 52 African countries we provide robust evidence of a positive aidcorruption
nexus. Development assistance fuels(mitigates) corruption(the control of
corruption) in the African continent. As a policy implication, the Okada & Samreth(2012, EL)
finding for developing countries may not be relevant for Africa.},
keywords = {Foreign Aid; Political Economy; Development; Africa},
pubstate = {published},
tppubtype = {workingpaper}
}

@workingpaper{Asongu2012b_28,
title = {Reversed Economics and Inhumanity of Development Assistance in Africa},
author = {Simplice A Asongu},
editor = {African 2012 Governance and Development Institute WP/12/034},
url = {http://www.afridev.org/RePEc/agd/agd-wpaper/Reversed-economics-and-inhumanity-of-development-assistance-in-Africa.pdf},
year = {2012},
date = {2012-02-01},
abstract = {Purpose – The purpose of this paper is to assess the aid-development nexus in 52 African
countries using updated data (1996-2010) and a new indicator of human development(adjusted
for inequality).
Design/methodology/approach – The estimation technique used is a Two-Stage-Least Squares
Instrumental Variable approach. Instruments include: income-levels, legal-origins and religiousdominations.
The first-step consists of justifying the choice of the estimation technique with a
Hausman-test for endogeneity. In the second-step, we verify that the instrumental variables are
exogenous to the endogenous components of explaining variables(aid dynamic channels)
conditional on other covariates(control variables). In the third-step, the strength and validity of
the instruments are examined with the Cragg-Donald and Sargan overidentifying restrictions
tests respectively. Robustness checks are ensured by: (1) the use of alternative aid indicators; (2)
estimation under restricted and unrestricted hypotheses ; and (3) adoption of two interchangeable
sets of instruments.
Findings – The findings broadly indicate that development assistance is detrimental to GDP
growth, GDP per capita growth and inequality adjusted human development. Given concerns on
the achievement of the MDGs, the relevance of these results point to the deficiency of foreign
aid as a sustainable cure to poverty in Africa.
Social implications – It is a momentous epoque to solve the second tragedy of foreign aid; it is
high time economists and policy makers start rethinking the models and theories on which
foreign aid is based. In the meantime, it is up to people who care about the poor to hold aid
agencies accountable for piecemeal results.
Originality/value – These findings are based on data collected after pioneering works on the
aid-development nexus. Usage of the inequality adjusted human development index first
published in 2010, corrects past works of the bunch of criticisms inherent in the first index.},
keywords = {Foreign Aid; Political Economy; Development; Africa},
pubstate = {published},
tppubtype = {workingpaper}
}