Increasing Foreign Aid for Inclusive Human Development in Africa

In the light of evidence that poverty has been decreasing in all regions of the world with the exception of Africa, where about 45% of countries in sub-Saharan Africa did not achieve the Millennium development goal extreme poverty target, this study assesses whether increasing foreign aid improves inclusive human development. The investigation is on 53 African countries for the period 2005–2012. The empirical analysis is based on (1) the generalised method of moments (GMM) to control for persistence in inclusive human development, simultaneity and time-invariant omitted variables and (2) Instrumental Variable Tobit Regressions to control for simultaneity and the limited range in the dependent variable. The adopted foreign aid variables are: ‘humanitarian assistance’, ‘action on debt’ ‘aid for social infrastructure’, ‘aid to the productive sector’, ‘aid to the multi sector’, ‘aid for economic infrastructure’ and ‘programme assistance’. The following findings are established. From the GMM specifications, there are (1) synergy effects from ‘aid to the productive sector’ and a positive net effect from ‘programme assistance’ and (2) negative net impacts from ‘aid to social infrastructure’ and human assistance, albeit with positive marginal effects. From Instrumental Variable Tobit regressions (1) there is a synergy effect from ‘aid for economic infrastructure’ and (2) there are negative net impacts from ‘aid for social infrastructure’, ‘aid to the productive sector’ and human assistance, albeit with positive marginal effects. Policy implications are discussed

The Comparative Economics of ICT, Environmental Degradation and Inclusive Human Development in Sub-Saharan Africa

This study examines how information and communication technology (ICT) could be employed to dampen the potentially damaging effects of environmental degradation in order to promote inclusive human development in a panel of 44 Sub-Saharan African countries. ICT is captured with internet and mobile phone penetration rates whereas environmental degradation is measured in terms of CO2 emissions per capita and CO2 intensity. The empirical evidence is based on Fixed Effects and Tobit regressions using data from 2000-2012. In order to increase the policy relevance of this study, the dataset is decomposed into fundamental characteristics of inclusive development and environmental degradation based on income levels (Low income versus (vs.) Middle income); legal origins (English Common law vs. French Civil law); religious domination (Christianity vs. Islam); openness to sea (Landlocked vs. Coastal); resource-wealth (Oil-rich vs. Oil-poor) and political stability (Stable vs. Unstable).Baseline findings broadly show that improvement in both of measures of ICT would significantly diminish the possibly harmful effect of CO2 emissions on inclusive human development. When the analysis is extended with the abovementioned fundamental characteristics, we observe that the moderating influence of both our ICT variables on CO2 emissions is higher in the group of English Common law, Middle income and Oil-wealthy countries than in the French Civil law, Low income countries and Oil-poor countries respectively. Theoretical and practical policy implications are discussed