Aid Fragmentation and Development Outcomes in Sub-Saharan African Countries

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Date
2024-02-02
Authors
Dedehouanou, Sessinou Erick Abel
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African Economic Research Consortium
Abstract
This study examined the fragmentation of official development assistance (ODA) in Sub-Saharan African countries and the role played by development outcomes. Initially, it analyzed the fragmentation of aid over the period 2000 to 2019 using the Theil index. On the donor side, it appears that fragmentation of aid from bilateral Development Assistance Committee (DAC) donors and bilateral non-DAC donors has decreased significantly in recent years. In addition, the aid provided by bilateral DAC donors has been less fragmented than that given by non-DAC bilateral donors. Several traditional donors and so-called emerging donors have contributed to the fragmentation of aid in Sub-Saharan African countries. As for aid recipients, the countries of Southern Africa or those belonging to the group of so-called fragile states have suffered less from aid fragmentation than their counterparts in Central, East, and West Africa, and those belonging to the group of non-fragile states. We used an instrumental variables method and a panel quantile regression with non-additive fixed effect to assess the effect of the development factors on aid fragmentation. The results obtained validated that the fragmentation of aid can be reduced by better coordination of aid at the sectoral level, and above all, by internal development factors (structural transformation policies and equity in the use of resources). Indeed, no solution to the fragmentation of aid is possible without the implementation of structural policies to achieve a level of development capable of coordinating the action of donors and equity in the use of resources allowing the satisfaction of the needs of various social groups
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