Foreign Aid and Educational Development, in Sub-Saharan Africa: Does Domestic Institutional Capacity Matter?
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West African Institute for Financial and Economic Management (WAIFEM).
In this study, the effect of foreign aid on educational development is examined for countries in the sub-Saharan Africa region while taking into consideration the effects of policy capacity as intervening in the connection between aid and the education sector. Using data for 34 countries and for the period 1998 to 2017, the Fully Modified OLS technique is applied for the empirical analysis. The direct and indirect effects of both aid to education and educational expenditure are considered in terms of policy dimensions. It is found that aid to education directly improves educational access and efficiency but does not have a direct impact on either educational quality or share of budgets devoted to education by the countries in SSA. On the other hand, educational expenditure significantly improves both access and quality in the educational sector, but not efficiency. We also found that better policy capacity of SSA governments tends to improve the extent of aid effect on educational development (in terms of access, quality, efficiency or budgetary allocation). The major policy implication of the results is that the establishment and sustenance of quality institutions that support policy making and implementation in SSA is a veritable means of attaining effective linkages between educational resource use and outcomes in the region.
Adegboye, A.C., Alao-Owuna, & Osobase, A.O. (2021). Foreign Aid and Educational Development, in Sub-Saharan Africa: Does Domestic Institutional Capacity Matter?. West African Financial and Economic Review, 21(1), 47-75.