Print | Back

Skip to Content

UNU-WIDER Logo

30 Years of economics for development

WP/007 Impact of Foreign Aid on Economic Growth in Sierra Leone: Empirical Analysis

Research and Communication on Foreign Aid
This paper examines the impact of foreign aid on economic growth in Sierra Leone, a country where an empirical econometric study on aid effectiveness is yet to exist. Using a triangulation of approaches involving the ARDL bounds test approach and the Johansen maximum likelihood approach to cointegration for the period 1970-2007, we find that foreign aid has a significant contribution in promoting economic growth in the country. This finding is found to be robust across approaches and specifications. Whilst aid may have been associated with improvement in economic growth in the country, its impact during the period of war is found to be either weak or non-existent. Further, aid during the pre-war period is found to be marginally more effective than aid during the post-war period. The latter results suggest that the impact of aid may change with time.
Publisher:
UNU-WIDER
Series:
WIDER Working Paper
Volume:
2012/07
Title:
WP/007 Impact of Foreign Aid on Economic Growth in Sierra Leone: Empirical Analysis
Authors:
Philip Michael Kargbo
Publication date:
January 2012
ISBN 13 Web:
978-92-9230-470-6
Copyright holder:
© UNU-WIDER
Copyright year:
2012
Keywords:
growth, foreign aid, cointegration, Sierra Leone, ARDL, post-war
JEL:
F35, O11, O40, O55
Sponsor:
This working paper has been prepared within the UNU-WIDER project ‘Foreign Aid: Research and Communication (ReCom)’, directed by Tony Addison and Finn Tarp. UNU-WIDER gratefully acknowledges specific programme contributions from the governments of Denmark (Ministry of Foreign Affairs, Danida) and Sweden (Swedish International Development Cooperation Agency—Sida) for the Research and Communication (ReCom) programme. UNU-WIDER also acknowledges core financial support to UNU-WIDER’s work programme from the governments of Finland (Ministry for Foreign Affairs), the United Kingdom (Department for International Development), and the governments of Denmark and Sweden.
Format:
online