Least Developed Countries (LDCs) of Sub-Saharan African have been recipients of official development assistance for more than 5 decades; however they are still characterized by chronic problems of poverty, low living standards and weak economic growth. The hot question is: Is aid effective in promoting economic growth? Thus, this paper investigates the impact of aid on the economic growth of 12 least developed countries in Sub-Saharan Africa over a period of 20 years. I take a fixed effects instrumental variable approach and the results imply that aid has a statistically insignificant negative impact on economic growth. I therefore conclude that aid is ineffective in promoting growth, perhaps due to misallocation of aid or inefficient use.
Phiri, Maurice W.
"The Impact of Aid on the Economic Growth of Developing Countries (LDCs) in Sub-Saharan Africa,"
Gettysburg Economic Review: Vol. 10
, Article 4.
Available at: http://cupola.gettysburg.edu/ger/vol10/iss1/4