Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204974 
Year of Publication: 
2019
Series/Report no.: 
AGDI Working Paper No. WP/19/022
Publisher: 
African Governance and Development Institute (AGDI), Yaoundé
Abstract: 
This study contributes to the attendant literature by bundling governance dynamics and focusing on foreign aid instability instead of foreign aid. We assess the role of foreign aid instabilit y on governance dynamics in fifty three African countries for the period 1996-2010. An autoregressive endogeneity-robust Generalized Method of Moments is employed. Instabilities are measured in terms of variance of the errors and standard deviations. Three main aid indicators are used, namely: total aid, aid from multilateral donors and bilateral aid. Principal Component Analysis is used to bundle governance indicators, namely: political governance (voice & accountability a nd political stability/no violence), economic governance (regulation quality and government effectiveness), institutional governance (rule of law and corruption-control) and general governance (political, economic and institutional governance). Our findings show that foreign aid instability increases governance standards, especially political and general governance. Poli cy implications are discussed.
Subjects: 
Instability
Foreign aid
Governance
Development
Africa
JEL: 
C53
F35
F47
O11
O55
Document Type: 
Working Paper

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