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HAS FOREIGN AID IMPROVED GOVERNANCE AND HUMAN DEVELOPMENT IN WEST AFRICA?

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Egenti S., Nevo C., Onwe I., Faith T., Durodola O.
International Journal of New Economics and Social Sciences
|
2019
|
vol. 9(1)
215-227
EN
This study investigates foreign aid, quality of governance and human development in West Africa, adopting the Random-Effects Model (REM) of the Panel Data Analysis and Estimated Generalized Least Square (EGLS) estimation technique for 15 West African countries from 1990-2015. Governance Composite Index with Goal Post and Geometric Mean approach on six indicators of governance were constructed to treat foreign aid effects on governance collectively. Results showed that most foreign aids improve human development (income, life expectancy, and education). However, some foreign aids weaken the quality of governance. The researchers recommended that government should have little or no role in foreign aid influx into the economy; rather, foreign aid should be channeled through tax effort and private investment. More so, donors should concentrate on poor countries with good institutions if foreign aid must be channeled through government expenditure. Finally, an independent body should ensure mutual accountability between recipients and donors routinely to ensure foreign aid improves human development without weakening governance quality.
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