Nicholas Arbogast, an economics major in the Jack C. Massey College of Business, recently attended and presented a paper titled “Examining the Effectiveness of Official Development Assistance in Sub-Saharan African Countries” at the Issues in Political Economy (IPE) 28th Annual Undergraduate Research Conference in Economics. The virtual conference was held in conjunction with the Eastern Economic Association Annual Meetings February 25 – 28. The conference brings together economists and undergraduates, who also serve as discussants, from across the country to present and share their research with peers.
According to Arbogast, the effectiveness of foreign aid has often been thought to be somewhat ambiguous. Though additional funding may help to drive economic development, this may skew wealth distribution in low-income countries and drive political corruption. This research investigated the effectiveness of Official Development Assistance (ODA) in 11 Sub-Saharan African countries over a 60-year period (1960-2019).
Given the panel structure of the data, a fixed-effects model was used to determine the correlation between ODA and four key development indicators: average life expectancy, gross enrollment ratio at the primary schooling level, agricultural value-added and the age-dependency ratio. After controlling for a number of relevant macroeconomic variables, the findings suggest that higher ODA is associated with statistically significant improvement in all four development indicators. The positive associations may underlie important causal relationships which are critical for further understanding the nexus between the amounts of ODA received and economic development.
Early contributions to the research came from fellow students Grace Collier, Camille Herren and Bogle LaRue during a course in economic growth and development taught by Dr. Colin Cannonier. Cannonier served as research advisor and was also in attendance at the conference.