Effectiveness of Foreign Aid on Poverty Reduction in Sub-Saharan African Countries

Betelhem Hailmariyam BEKELE

Master's thesis

Abstract:

The paradox of the high volume of assistance inflow and high percentage of poor population in SSA countries triggered this research to investigate the direct effects of foreign aid on poverty reduction in SSA countries. The study intended to examine the role of foreign aid in alleviating income poverty and multidimensional deprivations over a short and relatively long period of time. The analysis of this study added to the existing literature by inspecting the role of assistance to mitigate poverty and contrasting the contribution of aid to the reduction of income and multidimensional poverty across SSA countries. Due to unavailability of poverty data, the cross-sectional approach proposed in the proposal modified to "pseudo" cross-section approach. To fill the gap in the data "pseudo" cross-sectional data designed for different countries at different but comparable periods of time. For the empirical investigation beta regression model applied. Results of the analysis indicate that ODA does not tend to reduce income poverty in the region irrespective of the duration. Moreover, ODA is significant to mitigate multidimensional poverty only over a relatively long period. Comparing results, ODA has made a relatively better contribution to alleviate multidimensional poverty in long period of time.

Abstract:

The paradox of the high volume of assistance inflow and high percentage of poor population in SSA countries triggered this research to investigate the direct effects of foreign aid on poverty reduction in SSA countries.The study intended to examine the role of foreign aid in alleviating income poverty and multidimensional deprivations over a short and relatively long period of time. The analysis of this study added to the existing literature by inspecting the role of assistance to mitigate poverty and contrasting the contribution of aid to the reduction of income and multidimensional poverty across SSA countries. Due to unavailability of poverty data, the cross-sectional approach proposed in the proposal modified to "pseudo" cross-section approach. To fill the gap in the data "pseudo" cross-sectional data designed for different countries at different but comparable periods of time. For the empirical investigation beta regression model applied. Results of the analysis indicate that ODA does not tend to reduce income poverty in the region irrespective of the duration. Moreover, ODA is significant to mitigate multidimensional poverty only over a relatively long period. Comparing results, ODA has made a relatively better contribution to alleviate multidimensional poverty in long period of time.

Keywords

Aid effectiveness, Beta regression, Foreign aid, Income Poverty, Multidimensional poverty, Sub-Saharan Africa

Language used: English

Date on which the thesis was submitted / produced: 8. 6. 2020

Thesis defence

• Supervisor: Ing. Mgr. Jaromír Harmáček, Ph.D.

Palacký University Olomouc

Faculty of Science

Master programme / field:
Geography / International Development Studies